Insights
Market Review - January 2021
January Overview
Much of mainland Europe’s larger economies also saw decreases in COVID cases during January. Unfortunately, the vaccine rollout has not been as swift as in the UK, which could impact the economic recovery across the region. This is already evident in the flash composite PMI figure for January showing a decline from 49.1 in December to 47.5 in January. And indeed, the restrictions that have been in place across the Euro area are already expected to have hampered this recovery somewhat as market estimates are for 1% quarter on quarter GDP contraction in Q4. The bloc is also still stuck in a deflationary environment with December CPI showing the fourth consecutive month of -0.3% and the fifth consecutive negative month. Despite this backdrop, the ECB’s Governing Council announced no additional monetary policy measures, although noted that they “stand ready to adjust all of our instruments” and that “ample monetary stimulus remains essential”.
