FRANKFURT (MktNews) - The OECD's Composite Leading Indicator (CLI) for the eurozone and its largest economies deteriorated again in February, the international agency reported Friday.
The eurozone leading indicator index fell for the ninth consecutive month in February to the lowest level since August 1999. Moreover, the 1.1% decline vs January was by far the largest during the latest downtrend.
The OECD indicator, which has proved to be relatively reliable in signalling peaks and troughs of the economy about six-months in advance, suggests that there will be no turnaround in the eurozone economy before late summer, at the earliest. The EMU leading indicator peaked in April last year, suggesting that the economy started to deterioriate in September/October.
The OECD's leading indicators for Germany, France and Italy -- the three largest eurozone countries account for about three-quarters of area GDP -- all fell in February, Germany for the 10th month in a row, France for the fourth time in the last five months and Italy for the sixth month in a row.
The rapid deterioration of the CLI for the eurozone and its largest economies is bad news for the ECB and, by itself, argues for a near-term rate cut at the next policy meeting on April 11. However, the ECB has emphasised that it still sees inflation risks in the eurozone, underlined by the above-expected inflation increase in the Netherlands reported Friday.