With the ECB on the radar this week, analysts at Scotiabank offered a comprehensive overview of the EZ. Key Quotes: "The euro zone recovery is expected to gain modest momentum, with real GDP growth rising to 1.7% in 2016 and 1.8% in 2017, up from 1.5% last year. Nevertheless, the region is not immune to the challenging global environment. After being one of last year’s global economic bright spots, the recent softening in key leading indicators, such as PMIs, consumer confidence and business sentiment surveys, suggests that the euro zone economy is succumbing to the slowdown in emerging markets and elevated financial market volatility. Indeed, euro zone growth has shown signs of moderation as households have pulled back on spending and weaker foreign demand has weighed on exports and industrial production. Meanwhile, domestic headwinds from the influx of refugees, heightened security amid terrorism concerns, new bank regulations, and the UK’s EU referendum present further downside risks to the regional outlook. The euro bloc has also slid back into deflation, with the headline HICP print declining to -0.2% y/y in February, from 0.3% in the prior month, largely due to lower oil prices. What is particularly alarming, however, is that core inflation has fallen to its lowest level in 10 months, at 0.7% y/y in February. Against this backdrop, the European Central Bank (ECB) is widely expected to unveil another round of monetary stimulus following the governing council’s next meeting on March 9th and 10th. The ECB will likely announce another cut to its deposit rate, currently at -0.3%, and step up its asset purchase program, which is presently set to run at €60bn per month until March 2017." For more information, read our latest forex news.