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Degraded German growth
The decision of the ECB of tomorrow is the main event of this week. Economists are always looking for an EQ, but all the leaks suggest that this will not happen. The rebound in bond yields is at least partly due to the belief that the central bank will keep its dry powder at QE (while extending deposit rates).
The euro is more about fiscal stimulus and growth. There was more talk of weak growth in Germany, with IFW and DIW lowering their forecasts today and now registering growth of 1.4 to 1.7% next year.
I fear that the ECB is moving more and more towards a critical position in which it is taking an aggressive stance and imploring governments to take over. This is the kind of thing that could lead to an abominable fall of the euro.
ForexLive
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