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FXstreet.com (Barcelona) - Brown Brothers Harriman analysts have continued to see the passive tightening of monetary conditions in the euro zone with the repayment of LTROs, leads to the big question of whether (and how) Draghi might address this at the press conference Thursday.

They are not expecting any action on rates, with Retail Sales slumping but PMIs improving. However, they wonder whether Draghi can really expect tighter conditions in this environment, including a stronger Euro. They note that in contrast, the Fed has signalled full speed ahead for now and as such, the relative size of these two central bank balance sheets seems headed in the Fed's favour, which the market would view as dollar negative. Yet they note that the US economic backdrop, while weak by historical standards, is surely the envy of most European policy makers. Today, US January US non-manufacturing PMI is due out, expected at 55.0 vs. a revised 55.7 (was 56.1) in December.
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