EU economy: Strength broadening from core - Westpac

In view of analysts at Westpac, Eurozone’s activity data reflect persistent survey strength for a solid 2017, but surveys continue to exceed actual data.

Key Quotes

“Absence of internal crises. Merkel’s CDU/CSU likely to lead another proEuro coalition with potential to move away from austerity.”

“ECB has prepared markets for tapering to be announced into end 2017. Low inflationary pressures may mean a less hawkish taper.”

“Despite all the positive signs, ECB “sources” have relayed concern that inflation pressures are not rising and EUR strength may crimp expansion.”

“Underemployment, despite lowering unemployment, could also keep ECB following gradual and cautious moves as it tapers its APP and delay a potential normalisation from NIRP/ZIRP.”