After a hectic ECB meeting in July (commented by Anders Svendsen here: Soft forward guidance from the ECB), we expect a calmer event for 1 August with no new measures being taken. With the July PMIs back in growth territory and a solid Ifo-Index, the case for a rate cut now looks weaker than it did a month ago when ECB Council members had “extensive discussions” about that. Both Mario Draghi and Executive Board member Peter Praet stressed that “50 basis points is not the lower bound”. In our view, a decline of key business cycle indicators or inflation rates is necessary to prompt further easing. While a rate cut is ... (full story)