• The European Central Bank (ECB) announced a new series of TLTROs starting in September 2019 and changed its forward guidance, with a commitment not to hike rates this year.
  • Eurozone economy: The ECB revised down its forecasts for inflation and GDP growth in 2019/2020, signalling that risks remain tilted to the downside. Since December, the economic outlook has significantly deteriorated. We remain of the view that domestic demand (and in particular household consumption) will continue to be supported by a strong labour market performance, strong income growth and the level of monetary policy accommodation. Subsequently, we believe that growth will gradually reaccelerate by the end of this year. However, core inflation is expected to remain significantly below the 2% target and risks remain skewed to the downside, especially in the short run. This fully justifies the dovish stance adopted by the ECB.