Thursday’s ECB meeting in Barcelona is likely to be marked by a big increase in internal tensions as peripheral demands for additional support and the growing sense of impending disaster clash with German inflation fears. Political constraints are likely to block significant action at this meeting, but Draghi is likely to emphasise downside economic risks as well as hinting at fresh interest rate cuts and possibly an even longer-term LTRO. Although the bank must try to maintain confidence, a weaker Euro would have an important economic benefit and would be secretly welcomed. The risk/reward bias is for further ... (full story)