Spectre of euro area deflation may return – Lloyds Bank

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 23, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    Research Team at Lloyds Bank, suggests that this week will be important for the euro area, as the ECB prepares for the possibility of further stimulus in March.

    Key Quotes

    “President Draghi has reiterated that the ECB “will not hesitate to act” if financial market turmoil has increased downside risks to the inflation outlook. The first hints of February CPI inflation in the euro area will come from preliminary estimates for Germany, France and Spain (all Fri).

    The euro area figures are due on the next Monday (29 February). We believe that another monthly decline in energy prices will result in a sharp fall in headline CPI inflation in Germany to 0.1%y/y from 0.5%y/y in January. Declines are also expected in France and Spain. The upshot is that euro area headline inflation looks set to fall back towards zero or even lower in the near term.”
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