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Energy prices fell 6.3%, contributing to the drop in inflation in the 20 European Union countries that use the euro currency. Inflation has fallen steadily as the ECB rapidly raised interest rates, the typical antidote to out-of-control price increases. Inflation decreased to 3.1% in Germany, Europe’s biggest economy, down from 3.8% in December and the lowest since June 2021. The decline in inflation has unleashed speculation that the European Central Bank could start cutting interest rates as early as April. And European growth could use a boost.

Persons: Christoph Swonke, ” Organizations: European Union, Energy, Union, European Central Bank, ECB, DZ Bank, Bank of England, U.S . Federal Reserve Locations: FRANKFURT, Germany, Europe’s, France, Europe, Iranian, Yemen, Africa, Suez, Israel, U.S

Trillions of euros of financial products, from mortgages to car loans, remain pegged to the Euro Interbank Offered Rate as Euribor is officially known. The move to revamp Euribor aims to reduce the burden on institutions that do provide input by using a standardised approach. Having the broadest possible geographical spread of banks in Euribor's panel is seen as the best way to have a full picture of euro-denominated lending costs. Schirmann highlighted that countries with active bank-to-bank lending markets such as Finland, Ireland and Greece currently had no banks on Euribor's panel. Cutting the need for banks to provide bespoke so called "Level 3" estimates should also "significantly diminish" the time and costs involved for banks.

Persons: Dado Ruvic, Libor, Jean, Louis Schirmann, Schirmann, EMMI, Marc Jones, Mark Potter Organizations: REUTERS, Federal Reserve, European Central Bank, Bank of England, Money Markets, Reuters, Deutsche Bank, Thomson Locations: Euribor's Brussels, Euribor's, Finland, Ireland, Greece

The Ifo institute said on Friday that its business climate index stood at 85.7, down from 87.4 in July. Reuters Graphics"The German economy is not out of the woods yet," Ifo president Clemens Fuest said. The economy then posted zero growth in the second quarter compared to the previous three months, separate data from the statistics office showed on Friday. The Ifo survey showed sentiment among German managers had become more pessimistic across all sectors in August. The Ifo survey chimed with flash PMI data released on Wednesday, which showed that German business activity contracted at the fastest pace for more than three years in August.

Persons: Annegret, Clemens Fuest, Christian Lindner, Klaus Wohlrabe, Claus Niegsch, Niegsch, Andrew Kenningham, Carsten Brzeski, Maria Martinez, Friederike Heine, Mark Potter, John Stonestreet Organizations: REUTERS, Reuters, . Finance, DZ Bank, Reuters Graphics, Capital Economics, Thomson Locations: Berlin, Germany, BERLIN, Europe

☆ EU to propose greater transparency for default swaps on eight banks - EU document
▼ + stars: | 2023-05-31 | by ( Huw Jones | ) www.reuters.com time to read: +1 min

LONDON, May 31 (Reuters) - The European Commission will propose greater transparency in the trading of credit default swaps of eight top banks to mirror rules in U.S. markets, a European Union document seen by Reuters showed on Wednesday. So-called single name credit default swaps have come under regulatory scrutiny after the fall and state-backed rescue of Credit Suisse triggered high volatility on the CDS market for some systemic banks, Deutsche Bank in particular, on March 24. "One of the conclusions on the events of Friday, 24 March, was that single name CDS contracts are opaque and illiquid," the EU executive body said in a document for a meeting of EU states on Thursday. The Commission said it proposes to re-insert CDS on Santander, BNP Paribas, Credit Agricole, Deutsche Bank, ING Bank, Intesa Sanpaolo, Societe Generale and DZ Bank into the scope of derivatives transactions subject to post trade transparency. Incomplete and asymmetrical reporting of CDS contracts linked to systemically important banks causes insecurity in markets during shocks, the paper said.

Persons: Intesa, Huw Jones, Jon Boyle, Kirsten Donovan Organizations: European, Reuters, Suisse, Deutsche Bank, Santander, BNP, Credit Agricole, ING Bank, Societe Generale, DZ Bank, Thomson Locations: EU

☆ Analysis: Traders relaxed as ECB starts running down massive bond holdings
▼ + stars: | 2023-03-01 | by ( Yoruk Bahceli | ) www.reuters.com time to read: +6 min

So far traders are optimistic, comforted by an initially small pace of bond sales and a predictable structure. U.S. and UK central banks have started QT, although the Bank of England was forced to delay its plans following turmoil in British bond markets last year. said DZ Bank's head of government bond trading Dalibor Jarnevic. If APP reinvestments stop before the end of 2024, ECB market presence would rely on reinvestments under the more flexible Pandemic Emergency Purchase Programme (PEPP). Whatever the size or pace, traders are seeking opportunities as the ECB makes the shift to QT.

Nov 28 (Reuters) - Euro zone government bond yields were higher on Monday after rare protests in China over the country's strict zero-COVID policies clouded the outlook for global growth and inflation. "The market is more concerned about the impact on inflation than the impact on growth," he added. Germany's 10-year government bond yield was up 4 basis points (bps) at 2.008%, after rising 12 bps on Friday. The gap between the 2-year and 10-year government bond yields rose to -20 bps. Italy's 10-year yield rose 8 bps to 3.94% pushing the closely watched spread between Italian and German 10-year yields wider by 5 bps to 191 bps.

☆ From Apollo to DZ Bank, funds snap up bargains in UK pension scramble
▼ + stars: | 2022-11-18 | by ( Nell Mackenzie | ) www.reuters.com time to read: +4 min

REUTERS/Hannah McKay/File PhotoSummarySummary Companies Pension funds still need to raise cashCredit funds pick up bargains from pension fund salesSome credit funds already sitting on profitsLONDON, Nov 18 (Reuters) - Credit funds at Blackstone, Apollo, DZ Bank and Astra Asset Management picked up bargains from UK pension funds during their scramble for cash, and some say pension schemes are still offloading assets as pressures persist. Hedge funds and private equity firms have taken advantage of the forced sales to snap up deals - including certain portions of collateralised loan obligations (CLOs), securities that pension funds invest in. The credit funds are already sitting on juicy profits on some of these trades. This is because these pension funds must match their portfolios to what they will owe retired members. Even though the markets have calmed, some pension funds are still dealing with the implications," said Mody.

☆ Analysis: Investors face expensive quest for year-end cash and safe assets
▼ + stars: | 2022-11-14 | by ( Yoruk Bahceli | ) www.reuters.com time to read: +6 min

Money markets too suggest securing cash and quality assets investors need to make a smooth transition into 2023 will be expensive. But analysts noted year-end is still 1-1/2 months away and the spread tends to widen in late November as demand for cash rises. The risk is any unexpected news emerging as liquidity thins further in December, requiring investors to reconsider positioning. BofA said it now sees year-end German repo 6 percentage points below the overnight rate, which it said would still make it the most expensive on record for investors borrowing bonds then. "It's still early days, but (last year's repo pricing) would probably be the best case already in terms of year-end pricing," Commerzbank's Leister said.

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