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Well, last thursday the ECB once again disappointed. Obviously it is also once again not the case if it is Draghis fault, or if the Bundesbank is the problem. With head line inflation at 0.3% and core inflation at 0.7%  things are looking bleak. 5y5y has now fallen bellow 2%, indicating what any sane man knew all along, that inflation expectation have be unanchored.

Meanwhile the earlier indicators point to very low growth in Germany in the third quarter, with a substantial risk that Germany is in recession. Early reports also indicate that Brussels wants to force Italy and France to cut spending sharply. Which will contract the Eurozone economy even further.  

We are approaching a perfect storm.

by rz on Mon Oct 6th, 2014 at 09:40:08 AM EST

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