Research Team at Rabobank, suggests that the Eurozone growth has slowed slightly over the course of 2015, supporting the view that global weakness is dampening the recovery, particularly in exports. Key Quotes “Consumer spending remains supported by falling unemployment and rising real wages, but investment is hampered by ongoing uncertainty. Following an already meagre 0.3% GDP gain in 2015Q4, various indicators, such as purchasing manager indices are pointing to a weaker start to the year. Our economic surprise index has deteriorated sharply over the past several weeks. We have reduced our 2016 growth forecast to 1.2%. Inflation On the back of sharply lower commodity prices (energy in particular) over the past six months, we expect inflation to remain close to zero for 2016 as a whole. February saw a strong negative inflation surprise, both in the headline as well as in the core measure. Although the German data suggested that some of that will be reversed in March (the volatile recreation component was largely responsible for the surprise), the latest surprise is likely to fuel concerns about second-round effects. Market-based inflation break-evens dropped to record-lows in February (5y5y forward down to 1.37%), after which we saw a modest pickup, on the back of higher oil prices and an improvement in risk appetite, which has also put a dent in the euro’s effective exchange rate.” For more information, read our latest forex news.