Another European Central Bank meeting is almost upon us, and these strategists are getting ready.
With the U.S. election finally behind us, it's time to turn to Europe and the goings on there. Greece is getting interesting again, German economic reports are downbeat, and the European Central Bank will have a meeting on November 8.
But if you're hoping for euro-moving news from the ECB, you'll probably be disappointed, say the strategists at Bank of America Merrill Lynch.
"The ECB meeting should be a non-event for the Euro, as we do not expect a rate cut or any other form of easing, but we see the risks slightly to the downside from dovish language," they wrote in a note to clients.
Even so, they do expect the common currency to trend lower for a variety of reasons. There is Spain's failure so far to ask for aid - and negotiations that are likely to be difficult if and when they do. Greece's problems don't look like they will end anytime soon, and Italy will hold elections in 2013. And then there are interest rates. "The ECB could loosen monetary policy after Spain asks for a program, as we project the Eurozone's recession to continue next year," the strategists say.
There is also the matter of what's happening with other currencies. The strategists expect some fiscal tightening in the U.S. as the year-end fiscal cliff approaches - and they think uncertainty created by the threat of the fiscal cliff will ironically drive investors into the safe-haven dollar.