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The upcoming October ECB meeting this week is drawing a lot of attention from the markets. This is because it will be the last meeting with current president Mario Draghi as head of the ECB.
Following the bank’s rate cut at its last meeting, we aren’t expecting the ECB to adjust monetary policy again.
The minutes from the last meeting revealed an intense split within the policymakers at the ECB with several members against easing. In light of this, the likelihood of doves being able to affect further easing at this stage seems diminished.
Eurozone Data Has Worsened
However, since the last meeting, data out of the eurozone has worsened materially.
Several key indicators over the last month have indicated weakness in the eurozone economy. Chief among these was the September manufacturing PMI. This showed that factory activity in the eurozone had fallen into contractionary territory, marking the indicator’s lowest readings since the global financial crisis.
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