The latest economic data suggest that the euro-zone economy will continue to grow slowly in the second half of the year, so the ECB will need to revise its forecasts down next week. We also think that it will cut its deposit rate by 10bp, but wait until October before announcing a new round of asset purchases. Meanwhile, the formation of a government in Italy has reduced the near-term risk to the public finances. But the coalition is fragile, so there is still a risk of bond yields jumping in 2020 if the government splits and there is an early election.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services