Today's main event will be the ECB meeting. The probability of immediate easing from the ECB has declined as indicated by statements from vice president Constancio that "the low figure of inflation in March will be corrected to a high figure in April". Other data has generally not deteriorated since the latest March meeting and the ECB could continue its current wait-and-see policy. However, the low inflation and the lowest wage inflation since 2009 should imply that the window remains open for the ECB to deliver a rate cut.
Euro area retail sales have the potential to surprise on the upside in February but might be revised down from a high number in January. Domestic demand has generally improved and survey indicators suggest room for further increases.
We expect the Italian and Spanish flash service PMIs to stay around current relatively high levels.
ISM non-manufacturing should increase in March after declining in February. The employment index, which was very weak in February, will be interesting to follow as it is a good indicator for labour market developments in the service sector where most jobs are. Initial jobless claims are also due for release today.
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