The ECB will likely remain on hold at its August meeting, keeping its key interest rates unchanged. The ECB can afford to wait-and-see on its policy settings for the time being as the recent economic indicators suggested improving growth momentum in line with its baseline scenario for a recovery in the Eurozone throughout H2. The ECB’s fundamental assessment of economic conditions is unlikely to change dramatically from the previous month. The ECB will likely mention the recent improvement in forward-looking indicators such as PMI indices, while still judging that risks to activity remain tilted to the downside. In ... (full story)