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Europe Week Ahead: ECB, BoE, EZ PMIs, German IP, UK PMI
Pressure for the ECB to do more has returned. We do not expect sovereign QE, but we acknowledge that Draghi’s concerns about the recent fall in long-term inflation expectations, which will be reflected in the official statement, might lead the Governing Council to act pre-emptively. Therefore, we expect an overall dovish tone, downward revisions to 2014-2015 staff forecasts for GDP and inflation, some modest tweaks to TLTRO conditions and a pre-announcement of ABS purchases, with operational details coming later on. Notwithstanding the risks to the staff forecasts, the ECB should welcome a number of positive (or, ... (full story)