Bank of America Merrill Lynch - "We have revised our projections to incorporate slightly stronger-than-expected data releases in recent weeks. This does not change our view that the euro area will likely be in a mild recession in H2 2012, given that fundamentals are unchanged. Our updated GDP projection is -0.6% for 2012E and -0.4% for 2013E, up from -0.7% for both years previously. Inflationary pressures look set to persist somewhat, owing to indirect tax hikes and elevated commodity prices. We forecast inflation at 2.6% in 2012E and 2.4% in 2013E, up from 2.3% and 1.7% previously. As we expect the economy to stabilise thanks partly to the ECB OMT backstop, we forecast unchanged interest rates over the whole projection period."