ECB should be mindful of the risk that inflation stays persistently below 2% target.Joint European borrowing to finance defence could bolster euro’s role by creating new safe asset.
There’s been a growing focus on the risk of undershooting the target at the ECB. Data throughout the summer will tell, but the markets don’t see that risk as German 10yr yields have been rising since the last rate cut.
This article was written by Giuseppe Dellamotta at www.forexlive.com.