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Q1 resilience, ECB losses

The latest survey data for February suggest that the euro-zone economy is holding up better than we expected in Q1. However, a contraction is still well within the realm of possibility. Meanwhile, we think that the significant losses that the ECB will record this year and next won’t impair monetary policy, but they main embolden the hawks to push for faster QT. Next week, we expect to learn that the euro-zone ESI and the Composite PMIs for Italy and Spain rose in February while euro-zone inflation fell in the same month and the unemployment rate held steady in January. 

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