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Eurozone: Inflation to fall to 0.0% in September, pick up in Q4 – Nomura

FXStreet (Delhi) – Research Team at Nomura, expect Eurozone inflation to fall to zero percent levels in September before picking up in Q4 while the inflation over the rest of the year should be largely driven by energy price.

Key Quotes

“The latter may be sufficient to stay the Governing Council’s hand until the base effects pushing up inflation wane in February next year.”

“We remain cautious on the medium-term inflation outlook owing to our expectation of a slower recovery in core inflation than the ECB expects as wage growth remains moderate.”

“A slower medium term inflation recovery underpins our baseline expectation that the ECB will extend the intention to conduct asset purchases beyond September 2016 to March 2017 as the next step.”

“While our baseline is for an announcement on 10 March 2016 (coinciding with 2018 projections), we acknowledge risks of an earlier announcement in Q4 this year.”

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