020 7898 0500In general, the euro has softened over the past week. Economic data missed forecasts last week, although it was still heading in the right direction.
However, the main catalyst were comments from European Central Bank member Coeure who stated that the ECB hasn’t discussed changing policy. He went on to say that discussions may happen though. The ECB may give us more clues on Thursday.
We have a busy week ahead, with the release of the inflation numbers and the German ZEW data. Inflation has been heading towards the 2% target this year and this will help build the case for the tightening of monetary policy in one form or another. The ZEW number will give us the institutional view of economic sentiment for the next six months.
However, the spotlight will firmly be on the ECB meeting on Thursday. Markets will scrutinise and decipher the rhetoric for clues as to when the ECB will be changing monetary policy. There has been a lot of speculation that we could see a tapering of their programme of quantitative easing later this year.
