Research Team at Nomura, suggests that after the January ECB meeting, the market has quickly priced the probability of a 10bp rate cut in March. Key Quotes “However, EUR has been trading more strongly than after the October meeting, especially in G3 space. If we compare EUR cross performance after the October and January meetings, movements during those periods can be well explained by how 2yr rates reacted, except for current CHF weakness. Although EUR 2yr yields reacted similarly to 10 days after the October meeting, USD and JPY yields have moved very differently this time. As markets have already priced a 10bp rate cut in March, the ECB’s decision may not lead to renewed EUR weakness against USD and JPY. Nonetheless, we judge the current market pricing of the Fed’s rate hike path is too pessimistic and EUR/USD depreciation is still more likely in 2016.” For more information, read our latest forex news.