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Despite the peak in new cases in the Eurozone, analysts at Danske Bank do not think the economic implications of the virus have reached their nadir yet.

Key quotes

“We expect activity to continue to fall in the coming months, followed by a sharp rebound in H2 20 once the lockdown measurements come to an end and low energy prices boost private consumption. We now look for annual GDP growth of -3.2% in 2020.”

“We think the PEPP will put a hand under credit spreads and risk–sentiment as the ECB essentially signalled that ‘there are no limits to our commitment to the euro’.”

“We expect further declines in inflation rates in the coming months, with core inflation now averaging only 0.7% in 2020.”