Euro Grinds Higher as ECB Fights the Fed: Shover

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Nov. 19 (Bloomberg) -- Bloomberg's Scarlet Fu and Larry Shover, chief investment officer at SFG Alternatives, put futures in focus with a look at Euro-Dollar futures in "On The Markets." They speak on Bloomberg Television's "In The Loop."

Eurodollar futures.

I'm surprised given that the ecb has room to cut interest rates.

I do too.

It seems like the euro is quite content to drive higher.

For good, fitting reasons.

People are very comfortable on the lower rates in euro denominated bonds right now.

When you look at the u.s. interest-rate curve, that is creating a huge headwind for the u.s. dollar.

You have ecb.

If they are fighting the fed right now.

They don't like this appreciation of the euro.

Will mario draghi be able to do anything about it?

We don't know.

I will suggest that we should get short to the euro.

When you consider the fact that the u.s. has superior growth over europe and our dovish ness is slow compared to what could happen in europe, it is very overbought and time to get short.

We are seeing a case of dollar weakness versus euro strength.

Is that going to be the same dynamic in the coming weeks and months?

I think so.

But less and less.

The interest-rate differentials are the headwind for the u.s. dollar right now.

When you look at europe, they have had six consecutive contractions, there is potential deflation in the periphery with inflation targets at the core well below their levels.

When you measure all that and, you have to think that the dovish ness in europe will be much bigger than ours.

What will it look like in march when the federal reserve is anticipated to begin tapering?

I think the markets have affected that all in in the u.s.. i think the 10 year yield will be higher when we start tapering.

We are recovering.

We are taking baby steps.

A little bit of drama is built into the tenure curve right now.

I don't think we will be much higher than today.


we are on the markets once again in 30 minutes.

This text has been automatically generated. It may not be 100% accurate.


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