• Expect a temporary rebound in inflation in the coming months
  • It is likely that euro area economy will remain subdued in the near-term
  • There are signs that labour market is beginning to weaken
  • Will be in a better position to reassess inflation outlook and required action in December meeting
  • Sees general disinflationary process continuing over the medium-term
  • Will ensure policy remains sufficiently restrictive for as long as necessary

The euro is certainly benefiting from a bottoming out in sentiment as well as a retreat in Treasury yields over the past few weeks. But overall, the outlook for the region remains suspect at best as the economy continues to skirt on the fence of a recession while relying on hopeful optimism on inflation developments for now.