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The Eurozone economy will contract 8.3% in 2020 according to projections from Wells Fargo analyst. For 2021, they see GDP rising 4%. They have upwardly revised their global growth forecast one tenth of a percentage point for 2020 and three tenths for 2021, to -3.7% and 4.7% respectively.

Key quotes: 

“The level of economic activity remains depressed in most major economies, but a gradual recovery continues to take hold. Through the first six months of the year, the average level of Eurozone retail sales is “only” down 4.2%. In July, the Eurozone PMIs for manufacturing and services rose to 51.8 and 54.7, respectively. With both indices now firmly above 50, the pace of economic recovery in the Eurozone appears to be gathering momentum.”

“On net, a downward revision to Eurozone real GDP growth in 2020 has been more than offset by upward revisions to our expectations for 2021.”

“We do not anticipate any further easing from the ECB. Policymakers have thus far eschewed a deeper foray into negative rates, and we believe the magnitude and pace of asset purchases is sufficient at this time.”