- Mario Draghi, ECB President
German business confidence dropped for a second month in a row in January to the lowest level in almost a year, with manufacturers and construction companies becoming more pessimistic about the outlook for their businesses. The Ifo's institute's business climate index, based on a monthly survey of some 7,000 firms, declined to 107.3, down from a revised 108.6 last month. German manufacturing has been feeling ill winds stemming from a slowdown in global trade, with China's weakest economic growth in more than two decades sending markets into turbulence and urging the International Monetary Fund to downgrade its outlook for 2016. The German government predicts the nation's economy to expand 1.8% this year. German companies may feel some comfort from the European Central Bank President Mario Draghi's comments last week, signalling that the central bank had plenty of tools at its disposal to stoke Euro zone's inflation and was both determined and willing to act.
In the meantime, Draghi highlighted that the ECB should fulfil its inflation mandate in order to keep its credibility. ECB policy makers gather on March 10, when they will weigh whether the 1.5 trillion-euro QE programme and negative interest rates are sufficient to meet the inflation goal of just under 2%.
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