EUR: Bar for more ECB easing is high - ING

It's abundantly clear that the ECB wants to keep things boring at this stage, ING's FX analyst Francesco Pesole notes.

EUR/USD remains entirely a function of USD moves

"The only real highlight was the shift from a 'balance of risk' wording to a broader set of upside and downside risks to growth. Lagarde acknowledged some downside risks had eased, but didn't give much weight to the shift in wording. Admittedly, eurozone growth was better than expected in 3Q (0.2% QoQ), largely due to surprisingly strong French numbers (0.5% QoQ)."

"The coming weeks will see Governing Council members offering their nuances to the policy-inflation-growth assessments. But don't expect much. The ECB is clearly in a 'good place' at 2% and the bar for more easing remains high. Anyway, EUR/USD remains entirely a function of dollar moves, and post-FOMC price action is leading to speculation of a potential break below 1.150. "

"We don't see the conditions for another big leg lower in the pair, though. Jobs data need to confirm Powell's more cautious stance, and we doubt the bar is much higher for a Fed dovish repricing should US jobs deterioration continue. The contribution of the euro is small, but a slight improvement in the growth story and a firm ECB cannot harm. Our call remains bullish on EUR/USD into year-end."