- We estimate a trade war will reduce Eurozone growth by 0.25% in 2025
- ECB is fully mobilised to ensure financing of the economy and financial stability
- Certain market actors like leveraged hedge funds could face big liquidity needs
The impact to the euro area economy still seems up in the air at the moment, with the ECB themselves not fully sure. The interesting part of Villeroy’s remarks here is that he is pointing out some liquidity/funding stress. You don’t normally see that every day.
This article was written by Justin Low at www.forexlive.com.