ECB hawks are on the offensive, even floating the possibility of a rate hike next year. Meanwhile, the resistance by the doves to the hawkish onslaught has bee feeble. Concurrent with recent economic data, rate cuts are off the table;
I don't think conditions in the year ahead will warrant a hike. Growth is picking up on the back of a recovery in productivity (employment and the labor market are still cooling), but it will not be a boom that warrants ECB tightening. German fiscal stimulus will likely be delayed and, regardless, is offset by tighter policy elsewhere. There is nothing even resembling broad Euro Area fiscal stimulus next year;
Thursday's ECB meeting will be a boring hold, with the ECB again showing no inclination to change policy at the next several meetings. Expect a more positive tone on the economy, but that won't bring the ECB closer to a hike, the hawks daydream.
