ECB’s Lagarde: Consumer confidence is fragile, uncertainty to weigh on investment

• Last year’s growth pattern is continuing
• Manufacturing is a drag
• Uncertainty is holding back investment
• Services are resilient
• Survey’s suggest that employment growth is subdued
• Increased uncertainty to weigh on investment more than expected

Lagarde is highlighting why GDP forecasts were lowered.

• Most inflation forecasts point to a sustained return to target in the medium term
• Domestic inflation remains high
• Recent wage deals point to continued moderation in wages pressures
• Trade tensions could lower growth
• Risks to growth are tilted to the downside

This isn’t exactly an optimist press conference but euro traders are looking further out with Germany proposing to massively increase spending.

• Geopolitical risks create two-sided inflation risk
• Defense and infrastructure investment could raise inflation

This article was written by Adam Button at www.forexlive.com.