DIRS.INFO The most relevant business & tech news

☆ Markets could be about to get a big clue on when the European Central Bank will cut rates
▼ + stars: | 2024-03-06 | by ( Annette Weisbach | ) www.cnbc.com time to read: +1 min

European Central Bank (ECB) President Christine Lagarde speaks as she presents the bank's 2022 Annual Report to the European Parliament, in Strasbourg, eastern France, on February 26, 2024. FRANKFURT — The European Central Bank will meet again this week amid falling inflation, a slight recovery in economic activity and the overall understanding that its next interest rate move will be downward. The only question really for markets is, when will that happen? Some months ago, the markets were convinced that the March meeting will be "the one." The recent consumer price readings showed a slowdown of headline inflation to 2.6% in February, but service prices still rose by 3.9% for the month.

Persons: Christine Lagarde, Dirk Schumacher Organizations: European Central Bank, ECB Locations: Strasbourg, France, FRANKFURT

☆ Euro zone inflation, growth slow as ECB hikes weigh
▼ + stars: | 2023-10-31 | by ( Francesco Canepa | ) www.reuters.com time to read: +2 min

Summary Euro zone inflation lowest since July 2021 in OctGDP shrinks slightly in Q3FRANKFURT, Oct 31 (Reuters) - Inflation in the euro zone hit a two-year low a month after its economy began contracting, data showed on Tuesday, illustrating the dual impact of a steady diet of European Central Bank's interest rate hikes. But the brisk decline from the double-digit figures of just a year ago is coming at a cost: the euro zone economy dipped by 0.1% in the three months to September, according to a separate Eurostat release, and is flirting with a recession. "The data leaves the ECB firmly on hold," Dirk Schumacher, an economist at Natixis, said. "It's now down to weaker demand grinding down inflation and that's a slow process," Natixis' Schumacher said. "Still, continued economic and geopolitical uncertainty alongside the impact of higher rates on the economy will weigh on economic activity in the coming quarters."

Persons: Dirk Schumacher, It's, Natixis, Schumacher, Bert Colijn, Francesco Canepa, John Stonestreet Organizations: ECB, ING, Thomson Locations: FRANKFURT, European

☆ European Central Bank meets as bond markets wobble and economy turns south
▼ + stars: | 2023-10-25 | by ( Annette Weisbach | ) www.cnbc.com time to read: +1 min

Christine Lagarde, President of the European Central Bank (ECB), speaks during an ECB press conference in July. Picture Alliance | Picture Alliance | Getty ImagesFRANKFURT — The European Central Bank is expected to keep rates on hold when it meets this week in Athens. With recent bond market volatility, talk of an earlier exit from its quantitative tightening program might have to be postponed. Inflation declineThe inflation print in September showed a decline to 4.3% down from 5.2% in August according to Eurostat. That's faster than expected but upside risks to inflation prevail through wage effects and the threat of a higher oil price.

Persons: Christine Lagarde, Dirk Schumacher, Downside Organizations: European Central Bank, ECB, Getty, FRANKFURT, Eurostat Locations: Athens, Israel, Frankfurt

"The figures reinforce the view that interest rates have likely reached their peak in the current tightening cycle." The inflation drop was broad-based, with all price categories growing at a slower pace and energy prices falling outright for a fifth consecutive month. Euro zone inflation briefly hit double digit last autumn amid a combination of soaring energy costs, post-pandemic snags in supply chains and high government spending. So far, the ECB is sticking to its expectations of an economic rebound next year, partly thanks to higher real wages as inflation falls. "The rise in interest rates has been much quicker than in previous times so looking to the past as a model may mislead," Schumacher added.

Persons: Diego Iscaro, Dirk Schumacher, Schumacher, Francesco Canepa, Toby Chopra Organizations: Central, ECB, P Global Market Intelligence, Thomson Locations: FRANKFURT, Germany, China

"The inflation momentum is simply too strong for the ECB to pause," Danske Bank economist Piet Haines Christiansen said. In contrast, markets have fully priced in unchanged rates at next week's meeting of the U.S. Federal Reserve, which started raising rates earlier and has moved higher than the ECB. "We doubt that this will be possible and expect that a decision to hold rates steady today would mark the end of the tightening cycle." The euro zone's biggest economy, Germany, is bearing the brunt of an industrial slump and heading for recession, according to several forecasts. ECB President Christine Lagarde will hold a news conference at 1245 GMT.

Persons: Piet Haines Christiansen, Dirk Schumacher, Christine Lagarde, Catherine Evans Organizations: ECB, European Central Bank, Reuters, Danske Bank, U.S . Federal Reserve, Services, Thomson Locations: FRANKFURT, Germany

The central bank for the 20 countries that share the euro faces a dilemma. "The inflation momentum is simply too strong for the ECB to pause," Danske Bank economist Piet Haines Christiansen said. Just 14 months ago, that rate was languishing at a record low of minus 0.5%, meaning banks had to pay to park their cash securely at the central bank. The euro zone's biggest economy, Germany, is bearing the brunt of an industrial slump and heading for recession, according to several forecasts. On Thursday, the ECB is also expected to cuts its growth projections for this year and next, leading some economists to argue it should hold off from raising rates this month.

Persons: Piet Haines Christiansen, Dirk Schumacher, Catherine Evans Organizations: ECB, European Central Bank, Reuters, Danske Bank, Services, Thomson Locations: FRANKFURT, Germany

☆ Euro zone inflation falls further in comforting sign for ECB
▼ + stars: | 2023-07-31 | by ( ) www.reuters.com time to read: +2 min

FRANKFURT, July 31 (Reuters) - Euro zone inflation fell further in July and most measures of underlying price growth also eased, in a largely comforting sign for the European Central Bank (ECB) as it considers ending its severe run of interest rate hikes. Consumer prices grew by 5.3% this month versus 5.5% in June, extending a downtrend that started in the autumn. "Services inflation is the area where monetary policy should have the greatest influence because it reflects domestic demand," Dirk Schumacher, an economist at Natixis said. Hawks could also point at hard data about growth, which showed the euro zone returned to growth in the second quarter of 2023 despite negative sentiment and activity polls. The weak survey data has continued to come in in recent days, fuelling talk of a recession in the euro area that the ECB is still hoping to avoid.

Persons: Frederik Ducrozet, Christine Lagarde, Dirk Schumacher, Natixis, Francesco Canepa, Peter Graff Organizations: European Central Bank, Pictet Wealth Management, ECB, Oxford, Thomson Locations: FRANKFURT

Summary German public sector secures 5.5% rise for 2024Deal sets precedent, piles pressure on ECB's forecastsECB to raise rates on May 4FRANKFURT, April 24 (Reuters) - The "very generous" pay rise secured by Germany's public sector workers may complicate the European Central Bank's fight against inflation, analysts said on Monday. "The permanent increase next year may raise some eyebrows at the ECB because wages were supposed to peak this year," Natixis economist Dirk Schumacher said. Other economists noted the German public sector pay agreement followed a period of falling real wages, when prices grow faster than salaries. "Doves may argue that the deal comes after a period of wage restraint and is reasonably front-loaded," Christian Schulz, an economist at Citi, said. "This means that it will probably take at least another five years for public sector wages to recover this loss of purchasing power and for employees to have the standard of living they had in 2021," Fratzscher said.

☆ Stubborn inflation keeps ECB on course for more rate hikes
▼ + stars: | 2023-03-31 | by ( Francesco Canepa | ) www.reuters.com time to read: +3 min

"The pressure on the ECB to continue raising interest rates remains high," Commerzbank economist Christoph Weil said. Consumer prices in the euro zone rose by 6.9% in March after an 8.5% increase in February, implying the biggest drop since Eurostat started collecting data in 1991. Analysts polled by Reuters had expected headline inflation in the 20 countries that share the euro to come in at 7.1% and core inflation at 7.5%. Strengthening the case for more tightening, euro zone unemployment remained stubbornly low at 6.6%. This is a concern for policymakers who fear it could give workers greater bargaining power in salary negotiations and lead to higher wage increases that could perpetuate high inflation.

"That would be a problem for any central bank." TUG OF WARLagarde's commitment also puzzled ECB-watchers because the central bank had previously said it wouldn't make such public predictions - known as forward guidance - anymore, but instead take each decision based on incoming data. This of course leads to a tug of war between the ECB and the markets on the narrative," he added. ING's Brzeski said the ECB lacked a clear thought-leader on its Governing Council who could steer markets like Lagarde's predecessor, Mario Draghi. "The cacophony of diverging voices and the lack of clarity on who is the leading voice keeps hurting the ECB," Brzeski said.

☆ Analysis: Italy's rates clash with ECB a sign of things to come for euro zone
▼ + stars: | 2022-12-20 | by ( Francesco Canepa | ) www.reuters.com time to read: +4 min

Summary Euro zone governments offering cost-of-living subsidiesECB has warned it won't compensate for "policy errors"Clashes seen widening beyond ItalyFRANKFURT, Dec 20 (Reuters) - Attacks by Italy's new government on the European Central Bank over its plans to raise borrowing costs may be a sign of things to come for a euro zone struggling with inflation and debt. It also showed the ECB did not fear penalising the most indebted of the 19 euro zone countries, Italy among them, which tend to see their borrowing costs rise disproportionately when credit becomes more expensive. "The ECB is clearly ready to take risks with fragmentation in the euro area," Gilles Moec, chief economist at AXA Investment Managers, said. With bigger deficits to refinance and the ECB raising interest rates while also winding down its bond purchases, markets have pushed up yields across the euro zone and particularly for the weakest borrowers, such as Italy. But the ECB has been clear it won't be used to rescue countries that have made imprudent "policy errors".

Market betting has been swinging between a 50- and a 75- basis-point increase when policymakers meet on Dec. 15. "It's extremely exciting but predicting the ECB for a market participant has become impossible," Carsten Brzeski, global head of macro at ING, said. That saves it from more painful changes of tack after ECB President Christine Lagarde went from all but ruling-out rate hikes this year to presiding over the steepest tightening cycle in the euro's history. But Lane said in a blog post on Friday it may "overstate" how persistent inflation may be. "Inflation is being driven by factors they can't control," he added, citing energy prices, geopolitical tensions and supply-chain disruptions as some of them.

Search resuls for: "Dirk Schumacher"

12 mentions found