Euro bulls have had to overlook some soft activity indicators recently, and we doubt there are any expectations for a near-term recovery in the eurozone’s growth outlook. Today’s PMIs should just fall in line with the other sluggish surveys, and there is a tangible possibility the eurozone composite index will fall below the 50.0 expansion/contraction mark.
The question is whether the European Central Bank will react with faster easing due to slow growth. The answer to that depends on inflation and wage dynamics, which have so far…
