EU Sluggish Growth and Terrorism Threat to Force ECB to Add Stimulus

If there was any doubt that Europe will get another dose of central bank stimulus soon, it was removed Friday with data confirming that growth is slowing again.

Third quarter GDP across the 19 countries that use the euro grew by just 0.3% over the previous three months. That was weaker than expected and represents a slowdown since the second quarter, when the economy grew by 0.4%.

European Central Bank President Mario Draghi and fellow officials had already been talking up the chances of an interest rate cut, expanded money printing, or both, when they meet for the last time this year on December 3.

Friday’s growth figure, non-existent inflation, and unemployment rates stuck near 11%, make more monetary policy easing in December look like a done deal, barring a miraculous turnaround.

“The modest deceleration in growth reinforces the case for the ECB to deliver further stimulus at its December policy meeting,” noted BNP Paribas market economist Dominic Bryant.

via CNN

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza