German ESM Ruling: Reaction

Now that German courts have given the greenlight the ESM, we shall take a look at how the market has reacted.

 

EUR/USD M15

DAX30 M15

XAU/USD M15

BCO/USD M15

Key takeaways:

Prices have rallied predictably on the back of ESM ratification. However a few questions remain

- Will Italy and Spain apply for bailout funds under ESM?
- Will the amount in ESM be enough to save Euro-zone?
- Will there be another need for parliamentary approval since German Courts has ruled that German liability to the ESM must not exceed €190bn without asking the Bundestag for approval.
- Will German courts consider the Outright Monetary Transaction (OMT) a violation of German sovereignty?

Using the last big EU/ECB news as reference (OMT announcement), we could potentially be see inactivity while the European traders digest the news and weigh all the unanswered questions. Perhaps we may only see a strong rally/sell off during US market opening.

 

Get OANDA's exclusive weekly Market Pulse FX

Email Address: Preferred Format:
Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!