EUR ECON: Rates Still Exceptionally Low, Longer Term Infl Risks

The Bundesbank monthly report includes the views that interest rates are still exceptionally low and that that the economy no longer needs monetary policy support. The bank also feels that the strong money supply expansion signals longer-term inflation risks. Overall a hawkish slant on things but given that the ECB chief has adopted a similar line on current views the market has reacted. EUR/USD continues to trade tight just under 1.2854 session highs.