We expect the ECB to remain in wait-and-see mode at today’s meeting, as the impactof the latest easing measures is assessed. However, with growth slowing, inflationclose to zero and inflation expectations continuing to decline, the ECB remains underpressure to step up its easing. Hence, Draghi is expected to continue to sound verydovish and to do little to quell the increasing market expectations that QE couldbecome reality during 2015.
Bank of England is also expected to remain on hold. Recent data have on balancebeen weaker than expected, suggesting that the strong recovery in the UK has lost abit of momentum. Hence, a rate hike in the UK does not appear to be just around thecorner. The statement will likely be brief without much new information but nextweek’s Inflation Report with the new projections will be more interesting.
The Eurogroup finance ministers will meet in Brussels at 15:00 CET and areexpected to discuss Greece’s exit of the bail-out programme. Greece wants a ‘clean’exit but currently it seems more likely that unused bail-out funds will be convertedinto a backstop for Athens, requiring continued monitoring from Brussels.
German factory orders are expected to have rebounded substantially in September(and more than the current consensus), partly reflecting that the timing of the summerholiday weighed substantially on industrial activity in August.
In Denmark, there are several data releases.
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