Europe's Weakening Inflation Outlook Spurs Calls for ECB Action
- Mizuho sees ECB increasing pace of asset purchases in March
- RBS predicts 0.4 percentage-point cut to deposit rate in 2016
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Analysts at Mizuho International Plc and Royal Bank of Scotland Group Plc stepped up calls for more monetary stimulus as an indicator of the euro zone’s inflation outlook derived from forwards languished near a three-month low.
The five-year, five-year forward inflation swap rate-- which measures the price-growth outlook for a half-decade starting five years from now -- fell this week to the lowest since October. The market turmoil spreading from China since the start of this year is weighing on the measure, which strategists say is heaping pressure on the European Central Bank to act.