Euro Week Ahead: ECB Rate Meeting Highlights Key Macro Week

LONDON (MNI) - The European Central Bank's final monetary policy meeting of
the year next Thursday in Frankfurt tops a critical week for the global economic
recovery.

     The ECB will not only deliver its final interest rate decision of 2014 next
week, but will also publish up-to-date macro-economic projections for the coming
two years, forecasts that are expected to show a marked decline in both growth
and inflation as the currency area grapples to avoid its second recession in
five years.

     The estimates will come during a week in which we'll get a glimpse of
economic activity in China with official government PMI figures Monday, rate
decisions from the Bank of England (Thursday) the Bank of Canada (Wednesday) and
the Reserve Bank of Australia (Tuesday) and critical jobs and wage data from the
United States (Friday).

     Oil price dynamics will play a crucial role in the ECB's projections after
Brent crude prices hit four year low of $71.12 this week, en route to a 15%
decline so far this month - the steepest since November of 2008.

     Globally, crude prices are around 33% below the baseline forecast for 2015
oil prices used in the ECB's assumptions for its last inflation forecasts in
September, which called for an average Eurozone HICP rate of 1.1% next year and
1.4% in 2016. Inflation for the month of November was estimated at a five-year
low of 0.3%, according to fresh Eurostat data.