Today’s main event will be the ECB meeting. The probability of immediate easingfrom the ECB has declined as indicated by statements from vice presidentConstancio that “the low figure of inflation in March will be corrected to a highfigure in April”. Other data has generally not deteriorated since the latest Marchmeeting and the ECB could continue its current wait-and-see policy. However, thelow inflation and the lowest wage inflation since 2009 should imply that the windowremains open for the ECB to deliver a rate cut.
Euro area retail sales have the potential to surprise on the upside in February butmight be revised down from a high number in January. Domestic demand hasgenerally improved and survey indicators suggest room for further increases.
We expect the Italian and Spanish flash service PMIs to stay around currentrelatively high levels.
ISM non-manufacturing should increase in March after declining in February. Theemployment index, which was very weak in February, will be interesting to follow asit is a good indicator for labour market developments in the service sector wheremost jobs are. Initial jobless claims are also due for release today.
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Danske Bank