world market: World market themes for the week ahead
1. ECB DAY
Two weeks after unveiling its closely anticipated strategy review, the ECB will face questions at its Thursday meeting on what its new 2% inflation target might mean for policy.
If the ECB is serious about boosting inflation to 2% (versus close to but below 2% before), surely hefty bond buying will continue for some time? Doves are already arguing that to remain credible, the ECB needs to highlight its room for manoeuvre.
The hawks though are already pressing for tapering stimulus as the economy rebounds. Perhaps concern about a resurgent coronavirus hurting growth will allow ECB chief Christine Lagarde to find common ground at Thursday’s meeting. A quiet summer may be around the corner for most, not the ECB.
Many developed economies are pondering tapering…