EZ yields likely to fall further as pleas for fiscal stimulus ignored

The decline in the euro-zone Composite PMI for November reinforces our view that growth in the monetary union will deteriorate further in the coming months. With governments so far resisting pressure to loosen fiscal policy, we suspect that the burden of stimulating the economy will continue to fall on the ECB. This underpins our view that euro-zone bond yields and the euro will fall further between now and end-2020.