Output down by 25%, TLTRO demand to be strong

Data released this week suggest that the euro-zone economy contracted by about a quarter between February and April, and that there has been only a small rebound since then. Next week, the ECB is likely to announce a record uptake of its Targeted Longer-term Refinancing Operations, while EU leaders will meet to discuss joint fiscal action. Significant divisions between countries mean that they are unlikely to reach any firm conclusions.