March 25, 2021
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Covid-consensus is over-optimistic

  • Enthused by vaccine success in some countries, the consensus appears to be centred on a modal "return to normal" outcome in H2.
  • We see a higher probability of a more restrictive outcome, with downside risks to a more cautious mode.
  • Continued curbs on international travel create a fractured global economy, while local flare-ups will lead to periodic domestic restrictions.

March 17, 2021
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EA: final Feb inflation precisely in-line

  • EA HICP inflation for Feb-21 was confirmed at 0.9% y-o-y with the ex-tobacco index precisely in line with our forecast of 105.10 (0.8% y-o-y). The outlook is broadly unchanged, with a jump to 1.5% in Mar-21 still likely, in our view.

March 11, 2021
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ECB: insignificant prevention

  • The ECB announced no policy changes while indicating purchases at a “significantly higher pace than during the first months of this year”. A low pace in January and excess within the existing envelope means the difference may not impact markets.
  • Rather than attempt to reverse recent moves, we see the ECB trying to discourage an extension, thereby preventing a tightening inconsistent with the outlook. It is such a weak form of guidance, though, markets may test its limits if the US move extends.