Euroarea Recession Set to Worsen in H2-2012

Euroarea Recession Set to Worsen in H2-2012


Quotes from Standard Chartered:
-In our view, the euroarea recession is set to worsen in H2-2012: we expect q/q growth to return only in Q1-2013 and to remain well below its historical trend throughout next year.
-GDP data, combined with persistently weak business surveys across the region (including Germany), support our view that the European Central Bank (ECB) will cut the refi rate by 25bps in September to address the downside risks to growth, on top of measures to restore confidence in the peripheral debt market (particularly Spain and Italy).
-We think the deposit rate will stay at 0% in the coming months. The ECB's staff forecasts, released at the September meeting, are likely to be lowered, another reason to ease policy further.


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