EZA STILL EXPECTS ECB's 'REFI' RATE TO STAY ON HOLD UP TO MID-2010, WHEN ITS EXIT STRATEGY, TO BE AGREED THIS THURSDAY, IS LIKELY TO KICK IN.
· Confirmation of modest but uneven pick-up in activity in Q3, but falling construction output and retail sales and rising unemployment continue to act as a brake on recovery.
· 'Core' inflation continues to drift down but negative 'headline' inflation nearly eliminated in October and fall in factory gate prices levels off as external cost pressures persist.
· Underlying monetary growth slows almost to a halt and outstanding loans to households and non-bank corporations re cut back further.
· EZA still sees ECB remaining in wait-and-see mode through first half of 2010. Agreement on exit strategy expected to be announced on Thursday with gradual unwinding of special credit measures, and cautious raising of official interest rates, likely from mid-2010.
Please see attached the regular pre-meeting analysis from John Arrowsmith as a pdf file to read onscreen or simply print.
John Arrowsmith: ECB / Regulatory
Tel: +44 7720 59 1726
john.arrowsmith@eurozoneadvisors.com
Discussion Partners
John Arrowsmith: ECB / Regulatory
Tel: +44 7720 59 1726
john.arrowsmith@eurozoneadvisors.com
Dr Michael Clauss: Germany Politics / Economy / Equities Sectoral Analysis
Tel: +49 89 64254046
michael.clauss@eurozoneadvisors.com
© Eurozone Advisors Ltd
Documents associated with this article
|
|
EZA924.pdf
|
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article