We already know that Lagarde is making her plea to eurozone lawmakers for fiscal stimulus, with hopes to follow the leads of the U.S., and most recently Japan (which just announced the intent to launch a quarter of a trillion dollars worth of fiscal stimulus).

But will she do something more aggressive and creative on the monetary stimulus front?  Over the past few months, we’ve discussed the prospects of the ECB following the path of Japan, by outright buying European stocks.

It all boils down to the risks of the trade war ramping up in Europe.  As we’ve seen, global central banks (namely the Fed and ECB) made the mistake last year of ignoring the potential outcomes from the trade war.  The markets threw a penalty flag on them, and this year, they’ve been reversing course and positioning for the worst-case scenario.  There is far less downside from being positioned defensively and getting a positive surprise, than trying to react to a negative surprise. 

With this ECB meeting coming down the pike, let’s take a look at the recent trends in some key European data.