Q2 to set Euro direction
Quick summary on ECB's Praet:
- limited signs strong euro is dampening exports
- monetary stimulus remains necessary
- no evidence of durable softening demand
- Euro area data consistent with solid expansion
- Euro area data points to 'some moderation'.
- Monetary policy will evolve in data dependent fashion
So, the bottom line question for the ECB is; 'is Q1 an anomaly or part of a wider slowdown?'. The market will be interpreting the Q2 data to make a decision. Go with those flows as and when they happen.
