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Europe Week Ahead: ECB BLS, EZ Inflation & PMIs Data, Spain GDP, UK PMI
Next week’s most important data release for the near-term ECB outlook is the Eurozone July HICP flash estimate. There is little doubt that inflation is set to remain at its June low level (0.5%), and indeed we are in line with consensus in looking for a 0.4% YoY print. Yet, this may not stop the partial reverse in the ‘QE trade’ as new radical monetary measures are not expected in the short-term and recent forward-looking data continues to come in on the strong side, with the exception of the German IFO. Consequently, it would take a much larger drop-off in inflation for the ECB to launch an asset purchase ... (full story)