by Terence Roth
Wall Street Journal
October 24, 2011
A stalling euro-zone economy sets the stage for Mario Draghi to start his stewardship of the European Central Bank with a bang.
Consensus is building that the ECB will slash interest rates from 1.5% to 1.0% before the New Year, reversing the increases under the aegis of Jean-Claude Trichet earlier in the year.
The private-sector economy in the 17-country currency bloc showed a fast-sharpening contraction in business activity in October, with only a standout improvement in Germany preventing a deeper decline. The data were augmented by a drop in industry order bookings, which help predict the future.
The figures “convey an unambiguous message that the risks of a recession in the euro area are both material and increasing,” RBC Capital Markets told investors in a note.
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