European Central Bank President Mario Draghi will unveil fresh growth and inflation forecasts for the struggling Eurozone economy Thursday amid market speculation that a trade-lead global slowdown will push the central bank to revive its controversial quantitative easing program.

In one of his final rate-setting meetings before his planned departure in October, following seven years at the helm of the ECB, Draghi is likely to indicate that the simmering U.S.-China trade dispute has both blunted Europe's growth prospects and tamed any near-term uptick in inflation. And with consumer prices rising at just 1.2% around the single currency area -- well shy of the ECB's 'just below 2%' target for price stability, Draghi could be compelled to either take rates lower or re-start the bank's dormant €2.6 trillion QE program.  

"It will be interesting to see how the ECB balances the better-than-expected first quarter with still fairly weak confidence indicators," said ING's chief Germany economist Carsten Brzeski. "The latest escalation of the trade conflict, as well as more negative macro news from China, suggest that it could take until the third quarter for any rebound to take place. As a consequence, we do not expect major changes to the ECB projections."

At the very least, analysts have said, Draghi will announce another round of the bank's so-called TLTROs, a targeted lending scheme that pays Eurozone banks to borrow from the ECB and then lend the cash on into the real economy in order to kick-start growth.

TLTROs have helped offset a decline in profitability for regional banks, thanks in part to record low interest rates and a flat yield curve that has made lending far less lucrative in a slowing economy.

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The International Monetary Fund, meanwhile, said Thursday that "monetary policy accommodation by the ECB remains necessary" to ensure a second half recovery in the Eurozone, while calling on national governments, notably Germany, to increase fiscal spending to boost growth. 

The prospect of further rate cuts, in an economy that already charges banks 0.4% to hold cash overnight at the central bank, has pushed government bonds yields to new record lows, with benchmark German bunds, a proxy for risk-free interest rates, last seen at -0.227%

The euro has also sagged as a result, falling 1.55% over the past two-and-a-half months to around 1.1234 against the U.S. dollar as investors bet on either dovish forward guidance or a renewal of the QE program that was shuttered at the end of last year.

While a further dovish tilt from the ECB may not trigger a notable move in the euro, any suggestion of a return to QE could push the single currency sharply lower and complicate efforts by the U.S. Federal Reserve to stoke inflation and address slowing employment growth.

With more than $13 trillion in global government bonds -- many of them in the European market -- trading with a negative yield, further ECB purchases will drive prices higher, and yields lower, in a move that would entice more investors into the higher returns of U.S. Treasury bonds.

Benchmark 10-year Treasury note yields have fallen from 2.61% in late March to a December 2017 low of 2.10%, partly as a result of renewed bets on Fed rate cuts but also in response to a wave of overseas purchases.