ZEW’s Franz, head of the German Council of Economic Advisers (or “wisemen”) says the ECB will cut more and could take non-standard monetary steps (quantitative ease). The worst of the downturn will be seen this summer with recovery in 2010.
Merkel and Sarkozy have written to the EU presidency to say the G20 will institute regulatory reform when it meets early next month (sorry Tim!). They also say they welcome the EU signal that it is ready to help any EU state that needs support. They also tout European leadership on stimulus packages (sorry Tim!).
EUR/USD is trading in the lower end of its range as the knee-jerk bounce following the housing blip.
