ECB's Mersch sounds a bearish tone in Luxembourg

ECB's Mersch said "The longer the weakness in manufacturing persists, the greater the risk that other sectors of the economy will be affected". He also went on to say: "The likelihood of deflation remains limited, market expectations of inflation over the medium term are settling around values that are not consistent with our inflation aim".

Since the beginning of this year, euro area growth momentum has slowed markedly, by more than we had previously anticipated. The September ECB staff projections expect the euro area economy to grow by just 1.1% in 2019, 0.6 percentage points less than estimated in the December 2018 staff projections, and by 1.2% in 2020, down by 0.5 percentage points from the December projections.