Eurozone: ECB, PMI, ZEW and more – Danske Bank

The economic calendar shows a busy week ahead in the Eurozone. Events include the European Central Bank meeting and considerable economic reports. Analysts at Danske Bank, expect no new policy signals at the ECB meeting and another weak PMI print for the regeion.

Key Quotes: 

“After the recent ECB meeting where the Governing Council decided to end net asset purchases, new policy signals are not warranted at next week’s ECB meeting. We expect the debated growth risk assessment to take centre stage. At the last meeting, the ECB coined the growth risk assessment as broadly balanced but moving to the downside. Since then, we have seen a string of disappointing data. This is also visible in the surprise indicator, which points to lows around the sovereign debt crisis. We expect questions from the audience on liquidity operations but we expect no formal announcement until the March meeting.”

“On Tuesday, we are due to get euro area and German ZEW figures. In both the euro area and Germany, the current situation index has been falling over the past three months and we expect this to continue in January, especially in light of the recent Brexit developments.”

“On Thursday, we are also scheduled to get both German and euro area PMI. Euro area service and manufacturing PMIs fell in December to their lowest levels since 2016, fanned by the headwinds from weak Q3 data and new political risks in France. Furthermore, as we see ongoing weakness in China, as well as weak external demand and fragile risk sentiments in financial markets, we acknowledge downside risks for both euro area and German PMIs and we expect the euro area manufacturing PMI to fall to 50.7.”

“On Friday, we also get German Ifo figures, where we also see downside risks.”