The ECB remains on the sidelines
Despite a new cycle low in European inflation at 0.5%, the ECB has abstained from any easing measures. This decision confirms a certain tolerance to low inflation from the ECB while focusing on the improving growth outlook. Furthermore, it has to be noted that the new low has more to do with the timing of Easter (usually inducing a rise in travel and hotel prices) than a worsening of the inflation outlook. As a result, the next month is expected to be supported by this transitory positive effect.
Meanwhile, recent PMI indicators and sentiment indicators continue to suggest a persistent gradual recovery.
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MIG Bank