Data released this week showed that core price pressures in the euro-zone continued to fade at the end of last year as activity remained subdued. This supports our view that a weak economy this year will help to bring inflation down to target, enabling the ECB to begin cutting rates from April. Next week we will receive a flurry of data from across Europe which we think will show activity remained sluggish and inflation on a downward trend at the end of last year.
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