Market has overreacted to EU summit, says Nomura fixed-income strategist Desmond Supple. He says the announcements regarding the ESM do not meaningfully improve the policy response to the euro zone crisis, citing the ESM's difficulties of funding in size and at the pace required and the issue of the seniority of the ESM in bond buying. "What's actually come out is more disappointing even though I had really low expectations," he adds. "It doesn't meaningfully address the problems facing non-core countries." Nomura thinks that for the euro to remain intact, it would require very aggressive quantitative easing from the ECB. EUR/USD at 1.2570.
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