The ECB’s economic bulletin, released yesterday, warns of a ‘worsening outlook’ for the global economy as the coronavirus pandemic disrupts supply chains and economy activity. The Bank expects recovery this year to ‘gain only modest traction’. Predictions now point to a 0.8% growth in 2020, revised down by 0.3%.
Government budget balances in the eurozone are expected to continue declining until 2022, largely, the Bank says, attributed to lower primary surpluses.
The bulletin also reiterates the purposes of the European stimulus package, to safeguard liquidity in the bank sector, protect the continued credit flow through the economy and to prevent financial conditions magnifying the impact of the crisis.
The euro had a choppy day against both the pound and the dollar, ending down against both. It was not helped by German consumer confidence coming in far below expectations, at 2.7 rather than the projected 7.1.
This morning, Italian business and consumer confidence data came in largely as expected, both showing a decline. Beyond this, it will be a quiet day for data, so we can expect more movement to come from digesting the implications of actions from earlier in the week.
