FXStreet (Delhi) – Research Team at Nomura, suggests that the euro area business cycle moved into Slowdown in January – from a still-robust implied growth rate – after six months of Expansion. Key Quotes “Although momentum (on a smoothed basis) was only marginally negative, it was the largest decline in 15 months. Historically, shifts in business cycle positions have tended to be relatively rare and persistent over time. Although the last move into Slowdown (in June 2015) bucked that trend by returning to Expansion within two months, the sharp fall in momentum in January alone (i.e., unsmoothed) results in a high probability that the euro area will remain in Slowdown in February. Foreign demand momentum slowed in January across most countries after several months of resilience to external sector slowdown. The sharp decline in oil prices resulted in a further slowing of price expectations across the region, but supported renewed acceleration in consumer sector momentum. Weakening growth momentum increases the downside risks to the economic outlook, reinforcing our view that euro area GDP growth will be weaker than the ECB’s baseline. This, in conjunction with the deterioration in the headline inflation outlook due to lower oil prices, supports our expectation that the ECB will ease further in March, via a deposit rate cut of at least 10bp and an increase in the monthly pace of purchases. Growth ranking: The country ranking for implied growth rates was unchanged, with Spain growing at the fastest rate among the largest euro area economies. Despite some improvement, implied growth was slowest in Finland and Greece. Momentum ranking: 9 out of 14 countries experienced slower momentum (up from 6 in December). The number of countries experiencing negative momentum also increased to 6 (from 4 in December). Momentum in Greece remained the strongest in the region, while momentum in Germany was among the weakest in the region, positioning the economy further into Slowdown.” For more information, read our latest forex news.