The market has already discounted that the ECB will announce new stimulus measures on December 3rd, modifying the current debt purchasing programme. But monetary policy only goes so far, and apart from the central bank’s measures, the Eurozone needs more public and private investment to recover its growth potential.
The day after Draghi warned about greater than expected weakness in Eurozone inflation data, Spain’s final October inflation number has been published, confirming the -0.7% year-on-year preliminary figure. But despite the fact inflation remains in negative territory, the CPI rose 0.6% month-on-month.
Since the Eurozone’s recovery started two years ago, the number of people in work has grown in all EU member states individually during the last seven quarters. In Q2’15 it expanded by 1.9% on a y-o-y basis.
BARCLAYS | Headline inflation surprised slightly to the downside while core prices increased more than we had expected. At the non-core level, energy inflation remains weak (-8.7%). At the core level, both non-energy industrial goods (NEIG) and services prices increased by 0.1pp, to +0.4% and +1.3%, respectively, and leading the unexpected 0.1pp rise in core inflation.
James Alexander via Historinhas | Yet again today we saw the “zero (long and variable) lags” in monetary policy. Central bankers moving markets and thus changing NGDP Expectations happens all the time. It’s perfectly rational too.
Based on our latest in-house banking survey, sentiment towards the banking sector has deteriorated further over the past quarter. The decline in expectations on the banking outlook reflected rising global growth concerns, uncertainty over Fed funds rates, as well as volatility in commodity prices and currencies.
BARCLAYS | We have been arguing for some time that we see no grounds for attaching a high probability to a reflation scenario for the euro area, at least in the near term
LONDON | UBS | How would China’s fallout affect Europe’s economic growth?
New risks and setbacks again threaten Europe’s economic sentiment.
LA CAIXA RESEARCH | Convergence between core and periphery countries must improve in order to strengthen the eurozone’s future growth and sustainability.