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RATES SEEN HELD THROUGH TO END-2010/ 2011 Q1, WHILE SPECIAL CREDIT SUPPORT IS WITHDRAWN AND BOND MARKETS REMAIN IN TURMOIL
· Zero GDP growth now seen in 2009 Q4, with domestic demand down 0.2%.
· Economic activity continues weak and patchy at the start of 2010, with inflation notching up to 1.5% in April but still fairly subdued, but business confidence continues to improve.
· Decline in M3's annual growth rate seems to be petering out and lending to the private sector falls at a slower rate, with loans to non-financial corporations again cut back but mortgage lending to households continues to revive.
· ECB likely to hold back any rise in official rates on hold until end-2010 or 2011 Q1, wanting first to gauge the market impact of the withdrawal of its special liquidity support.
· Market reactions to the Greek rescue package likely to be a particular focus for debate.
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Discussion Partners
Dr Michael Clauss: Politics / Economy / Equities Sectoral Analysis
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michael.clauss@eurozoneadvisors.com
John Arrowsmith: ECB / Regulatory
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