Danske Bank's analysts note that the central banks in the euro area and the U.S. sent a clear signal this week that they are getting ready to step on the gas to underpin growth and inflation.

• “The ECB’s Mario Draghi was the first to prepare markets for a change in policy soon. At the ECB Forum in Sintra he struck a very dovish tone saying that ‘in the coming weeks, the Governing Council will deliberate how our instruments can be adapted commensurate to the severity of the risk to price stability’.
• Disappointing growth and inflation figures, sharply falling market inflation expectations and heightened risk from the U.S.-China trade war is behind the shift. We have changed our forecast and now look for the ECB to cut rates by 20bp, introduce a tiering system for interest rates, extend forward guidance, and restart quantitative easing (QE). This could happen in September.
• The Fed joined the dovish choir on Wednesday. Most importantly the Fed removed that it was ‘patient’ and says ‘the Committee will closely monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion’ while also stating that uncertainties have increased. We continue to look for a rate cut in July and a total of 75bp of cuts in H2.”