Oliver Mangan: Financial markets forecast ECB will start to cut rates in June

The euro sign sculpture is seen outside the European Central Bank (ECB) headquarters in Frankfurt, Germany.

The eurozone economy stagnated between autumn last year and the summer this year, with flat domestic spending and a decline in exports offset by higher inventories. However, the data since mid-year suggest the economy could now be entering recession. 

Retail sales fell sharply by 1.3% in August after a fall of 0.1% in July; industrial production expanded by 0.6% in August, but only after a contraction of 1.1% in July; and monetary aggregates also continue to weaken, with money supply falling by 1.2% and credit growth to households slowing to 0.8% year-on-year in September.