Weekly Economic Briefings > Eurozone Weekly Economic Briefing > Eurozone

This week was undoubtedly an up and down one for the Eurozone. On the one hand, Augusts business survey data and Julys credit figures provided further indications that the recovery may have regained momentum in early Q3 and be starting to broaden.However, the recent oil price falls, the rise in the euro and falling market-based inflation expectations suggest that the ECB faces a tough job to return inflation to target any time soon. And this challenge could become even more onerous if the slowdown in China persists and adds to disinflationary pressures in the currency bloc.At next weeks ECB press conference, Mario Draghi will thus face a tough balancing act. While the growing downside risks to activity and inflation perhaps suggest that further monetary loosening might be warranted, the positive data suggest that the ECB can afford to wait and see if Chinas policymakers respond further and whether the recent rebound in financial markets continues.