Forex Flash: More LTRO repayment, new Italian Parliament and Cyprus today – TD Securities

FXstreet.com (Barcelona) - From the Euro area today, TD Securities expect another sub €10bn repayment in the 3-year LTROs, “but unless we see a significant upside surprise, the announcement today and over coming weeks is likely to have little market impact”. Also, the new Italian parliament is sworn in today, “where the negotiations toward forming a workable coalition begin”. “The President next week begins to sit down with parties on forming a government and the Chamber of Deputies and Senate discuss naming a President to head each House, so headline risk once again returns, while it is still likely it takes at least two weeks at the earliest before we may get close to forming a government”, wrote analyst Tim Davis.

In regard to the EU Summit, the bailout to Cyprus is the main focus: “Political posturing over the last few days suggests they may not have yet reached a final decision on the composition of the bailout”, Davis said, adding that “leaders are trying to limit the cost of the government bailout by putting some of that cost on to bank depositors so if they have reached this compromise there is at least some risk we have the Cyprus bailout announced today.