Mario Draghi has 10 days to gauge recovery for ECB stimulus decision

Bloomberg

European Central Bank officials are approaching a major decision on new stimulus amid conflicting economic data and differences over what to do about it. Economists at the ECB are preparing forecasts for President Mario Draghi to unveil next week that will show whether they still believe an upturn will materialise in the second half of the year. The Governing Council must then decide if it should yet again deploy any of its many tools — including a new round of bank loans — to boost growth and inflation.
Policy makers will get the latest economic confidence data this week, and inflation and unemployment in the final days before their June 6 meeting.
Some policy makers were already losing confidence in the outlook at their decision in April, according to an account of the meeting published last week. Data since that meeting have been inconclusive, with an apparent disconnect between surveys and market indicators that show worsening sentiment, and hard numbers such as gross domestic product and household consumption that suggest resilience. “The overall picture is still one of below-trend growth,” said Aline Schuiling, senior economist at ABN Amro Holding NV in Amsterdam. “The big question is what will the ECB do. The minutes showed that they are struggling with inflation expectations, which are quite low.”
Those inflation expectations, a measure of whether investors are confident the ECB will meet its mandate of restoring price stability, are a critical part of
the puzzle. While both headline and core inflation topped
estimates in April and underlying gains were later revised even higher, expectations have continued to plunge.