A European Central Bank rate cut won't come right away, but this strategist thinks it's in the bag for late 2012.
Mario Draghi, the European Central Bank President, does sure sound determined when he talks about preserving the euro. He's got plenty of investors less worried about tail risk for the common currency, too, if its recent strength is any indication.
But there is short term euro relief and there is long term euro uncertainty, and Callum Henderson, Global Head of FX Research at Standard Chartered, is drawing a clear line between the two.
"Over the short term, clearly it has had a boost," he told CNBC. But that only goes so far, he says. "One has to differentiate between the crisis and the cycle. The crisis has moderated to some degree," thanks to the European Central Bank's stimulus move, he says. But "the cycle has not changed at all. The cycle is very bearish."
Henderson is not expecting the European Central Bank to cut interest rates at its upcoming meeting, since he thinks the focus will be on the new bond buying program and the troubles in Spain and Greece. But later this quarter, he says, "we expect one more cut."
So how can you trade Henderson's view?
He doesn't recommend selling the euro at current levels, since he thinks it could still have a short term bounce. But "anywhere with a 1.3 handle, you should sell," he says. "The euro zone cycle remains bearish, and Greece has a unique ability to snatch defeat from the jaws of victory."
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