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Draghi denies deflation

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  • Sanctions against Russia were announced yesterday, but once again were personal in focus, not macro. The economic impact is therefore limited.
  • Draghi denies deflation (and plays down the necessity of Euro area quantitative policy). German CPI is expected to pick up a little, which may help market perceptions around deflation risk.
  • Euro area business and consumer confidence are due, hedged with the normal caveats as to quality but expected to validate the view of subtle recovery. M3 broad money supply is likely to be more mediocre however, reflecting the subdued nature of banks' lending.
  • UK Q1 GDP should show reasonably good performance (the consensus is for over 3% growth in real terms) although it is the more established strength of nominal growth that matters for debt metrics. US consumer confidence is due.

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