The growth of eurozone exports in April-May was modest, rather than spectacular, and uneven across individual euro-member states. While a cheaper euro has likely helped boost peripheral eurozone economies’ exports and this may become more obvious in forthcoming data, other factors – including weak emerging market demand – are clearly also at play. Read more
The ECB meets on 22 January and with Eurozone inflation having turned negative and growth stalling, there is a high probability it will announce a fully-fledged bond buying program. Its immediate goal will be to cap peripheral bond yields and systemic risk ahead of Greek elections on 25 January. Ultimately it will be tasked with staving off deflation and generating jobs – a tall ask for a measure of last resort which by definition has its limitations. Its effectiveness will depend on its size – likely to be around €1 trn – and modalities but will be curtailed by its late timing. For EUR/USD it likely means further downside in coming months, in my view. Read more