The last major data points for the Eurozone ahead of Thursdayâs meeting are out and send a mixed picture. Inflation came in below expectations further stoking deflation fears. Employment numbers, however, came in better than expected with Spain reducing unemployment by over 100,000 jobs for the second month in a row, while both Italian and Eurozone unemployment rates were high but not as bad as feared. Traders today have focused more on the employment than the inflation results sending European indices lower and EUR (along with the pegged CHF and DKK) higher this morning on the feeling that these results take some of the pressure off the ECB to act. While the central bank may still cut interest rates, perhaps even into negative territory, the potential for a massive US, UK or Japan style new QE program appears increasingly unlikely. Itâs important for traders to remember that the ECB has just completed a stealth taper of its own. Between September of 2012 and March of 2014, weekly LTRO repayments cut the ECBâs balance sheet from â¬3.1 trillion to â¬2.1 trillion. This is likely the main cause of the drag on inflation in Europe lately which is why the central bank may focus more on employment. With the ECB balance sheet levelling off in the last two months, the stealth taper appears to be over which may enable inflation to rebound on its own going forward. US indices are dropping back today in a normal trading correction after the Dow and S&P both finished at record high closes yesterday. The broader Russell 2000 slipped yesterday suggesting small caps were not confirming the gains made in big caps.