As widely expected, the ECB cut its policy rates by 25bp yesterday, but its policy statement was a bit more dovish than anticipated and a 50bp cut in the future is a growing possibility. Meanwhile, hard activity data suggest that the economy may have grown at a moderate pace in the third quarter but the surveys point to stagnation. On balance, we think that economic growth was probably very weak in Q3.
Next week, the euro-zone Flash Composite PMI for October will be published, which we expect to indicate that activity was unchanged from the previous month.
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