The European Central Bank maintains a cautious stance as inflation shows signs of resilience. ECB Chief Lagarde projects reaching the 2% target by 2025, barring major economic shocks. Germany's unexpected inflation uptick to 2.0% from 1.6% raises eyebrows among economists.

While the ECB has already cut rates to 3.25% and more cuts are expected, Bundesbank President Nagel advocates for patience. Some analysts push for aggressive 50bp cuts, but concerns about premature easing persist.

But there is this little economic problem in Europe: no growth and fast rising public debt. Rising rates on the bond market threaten to collaps the whole zombie economy ZIRP created that will pull down the banking sector and gov budgets into chaos and illiquidity. If You watched UK's Gilts this week You know what's coming to the Eurocommies...