ECB’s Draghi to Cut as Fragile Truce Fails to Boost Trade

(Bloomberg) -- The euro-area economy has held up well recently, but the European Central Bank is clearly worried about the darkening prospects for demand. The fragile truce reached by China and the U.S. at the G-20 meeting this past weekend is unlikely to provide much of a let up for manufacturers and exporters. This is reflected in the Bloomberg Economics’s Traffic Light Dashboard, which helps monitor the main indicators the Governing Council will be considering and now suggests a change to forward guidance in July and a rate cut in September. If underlying price pressures or the labor market were to weaken -- creating more green in the momentum column of the dashboard -- further action would be likely later this year.

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