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☆ Markets underestimate geopolitical risk as raft of elections looms, ECB's De Guindos says
▼ + stars: | 2024-05-16 | by ( Jenni Reid | ) www.cnbc.com time to read: +2 min

And simultaneously, we are referring to geopolitical risks. I think that, you know, markets sometimes are underestimating the potential impact of geopolitical risks that are there," Luis de Guindos told CNBC's Annette Weisbach. Rising geopolitical risks present "considerable downside risks," the ECB warned in the report. The report attributes the rally in financial markets to analyst expectations of interest rate cuts from major central banks this year. "And that's the element that you cannot ignore, you cannot overlook this potential impact that could affect risk aversion, risk attraction, commodity prices, growth, overall growth in the global economy."

Persons: Luis de Guindos, CNBC's Annette Weisbach, De Guindos Organizations: European Central Bank, Stock, U.S, ECB Locations: U.S, Europe, East, Ukraine

☆ Economic outlook has improved but markets underestimate geopolitical risk: ECB's De Guindos
▼ + stars: | 2024-05-16 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailEconomic outlook has improved but markets underestimate geopolitical risk: ECB's De GuindosLuis de Guindos, vice-president of the European Central Bank, discusses the institution's latest Financial Stability Review and market perceptions of geopolitical risk.

Persons: De Guindos Luis de Guindos Organizations: European Central Bank

☆ ECB's de Galhau says monetary tightening has been more successful than expected
▼ + stars: | 2024-01-16 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailECB's de Galhau says monetary tightening has been more successful than expectedGovernor of the Bank of France, François Villeroy de Galhau, discusses the potential for interest rate cuts and the transmission of monetary policy.

Persons: Galhau, François Organizations: Bank of France

☆ Dollar advances as traders weigh rate cut expectations, eyes on data
▼ + stars: | 2024-01-16 | by ( ) www.cnbc.com time to read: +4 min

Traders are back projecting cuts of 160 bps this year, up from expectations of 140 bps last week. Chris Weston, head of research at Pepperstone, said the risk is that Waller could push back on market pricing for a March cut and show a lack of urgency to normalize policy. "That said, should he even remotely validate market pricing, then we should see U.S. 2-year bond yields fall further. Markets are pricing around 120 bps of rate cuts by the Bank of England in 2024, with the first one most likely in May. Elsewhere, the Australian dollar fell 0.43% to $0.6632, while the New Zealand dollar fell 0.39% to $0.6176.

Persons: Hamish Pepper, Christopher Waller, Waller, Chris Weston, Weston, Bank's Joachim Nagel Organizations: U.S, Federal, Bank of Japan, Fed, Traders, Asset Management, Treasury, Bank of England, New Zealand Locations: Tokyo, Japan, U.S

☆ Morning Bid: Japan CPI to light up dulled Thanksgiving trade
▼ + stars: | 2023-11-23 | by ( Denny Thomas | ) www.reuters.com time to read: +3 min

Tom Turkey float rides during the 97th Macy's Thanksgiving Day Parade in Manhattan, New York City, U.S., November 23, 2023. With Wall Street shut for Thanksgiving on Thursday, Asian investors will miss the usual swing factor. Instead, Friday's release of Japan's core inflation data for October will set the tone for trading in the region. Japan's core consumer inflation likely accelerated again in October, staying above the central bank's 2% price target for a 19th straight month, according to a Reuters poll. But some of the inflation-easing trade is already priced into the market, reflected in the near 11% rally in the MSCI world index (.WORLD) in the past 18 trading days.

Persons: Tom Turkey, Brendan McDermid, Denny Thomas, Josie Kao Organizations: REUTERS, Rights TORONTO, Bank of, Beijing, European Central Bank, Stocks, Malaysia CPI, Thomson, Reuters Locations: Manhattan , New York City, U.S, Japan, China, Europe, Singapore, New Zealand, Thailand, Taiwan

☆ Morning Bid: Chip stocks cheered while the rest retreat
▼ + stars: | 2023-11-13 | by ( ) www.reuters.com time to read: +2 min

The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, October 30, 2023. Monthly retail sales data is due on Wednesday but the country's Singles Day shopping extraganza over the weekend - equivalent to Black Friday sales elsewhere - recorded only meagre growth. A sub-index of tech shares remained firmly positive but another of mainland property developers slumped more than 1%. U.S. retail sales data is also due on Wednesday, preceded by CPI a day earlier. ECB President Christine Lagarde last week said that rates will stay restrictive at least for several quarters.

Persons: Kevin Buckland Chip, Christine Lagarde, Luis de Guindos, Catherine L, Mann, Huw Pill, BoE's Mann, Sweden SEB, Kevin Buckland, Edmund Klamann Organizations: REUTERS, Staff, Wall, Reuters, Nikkei, CPI, Federal Reserve, Finance, Bank of England, New York Fed, Thomson Locations: Frankfurt, Germany, China, Hong Kong, Elswhere, Sweden

☆ ECB must keep rates at or near 4% through 2024 to get inflation down -IMF
▼ + stars: | 2023-11-08 | by ( ) www.reuters.com time to read: +3 min

"Monetary policy is appropriately tight and needs to remain so in 2024," Kammer told a news conference. "For all intents and purposes, (the deposit rate) should be held at that level or close to that level throughout 2024." Kammer warned the ECB against cutting rates too soon because that would require even more costly policy tightening later on. While the IMF sees price growth back at target in 2025, an exceptionally tight labour market could push this date back to 2026, it warned. Real wages also have some way to go catch up with inflation and this could also keep up the price pressure, the IMF said.

Persons: Ralph Orlowski, Alfred Kammer, Kammer, Balazs Koranyi, Mark Potter Organizations: European Union, European Central Bank, REUTERS, Rights, International Monetary Fund, ECB, IMF's European Department, IMF, Thomson Locations: Frankfurt, Germany, Gaza

☆ EUROPE Australia hikes but tempers its outlook
▼ + stars: | 2023-11-07 | by ( ) www.reuters.com time to read: +3 min

Two women walk next to the Reserve Bank of Australia headquarters in central Sydney, Australia February 6, 2018. The Aussie dollar fell more than 0.8% and Australian government bonds rallied because the 25 basis point hike by the Reserve Bank of Australia came with a softening of language on whether further hikes would be needed. It was an otherwise quiet session in the absence of major updates that might have consequences for the interest rate outlook. Last week's chaos in Chinese money markets has subsided but it left behind a glimpse of financial pressures beneath the surface and the challenges around China's uneven recovery from the COVID-19 pandemic. British house prices, German industrial output and European producer prices are due later on Tuesday, as are earnings from UBS (UBSG.S).

Persons: Daniel Munoz, Tom Westbrook, Read, SoftBank, Benjamin Netanyahu, Fed's Waller, Logan, Schmid, ECB's de, Edmund Klamann Organizations: Reserve Bank of Australia, REUTERS, Bond, South, Read Reuters, UBS, 163rd Melbourne, NY, Thomson Locations: Sydney, Australia, Asia, Japan, British, Gaza

☆ European stocks open lower as earnings roll in; Standard Chartered plunges 10%; ECB set to hold rates
▼ + stars: | 2023-10-26 | by ( Jenni Reid | ) www.cnbc.com time to read: +1 min

Auto stocks plunged 3.45% as results disappointed, while travel stocks traded 1.7% lower. European stock markets opened sharply lower Thursday as attention remains on third-quarter earnings and government bond yields. Results are out from a slew of companies including Standard Chartered, BNP Paribas, TotalEnergies, Volvo Cars, Novozymes, Volkswagen, Carrefour, Saab and Wacker Chemie. Meanwhile, monetary policy decisions are due from the European Central Bank — for which markets have priced in a more than 98% likelihood of a hold in interest rates — and the central bank of Turkey, from which economists polled by Reuters anticipate a 500 basis point hike to 35%. The benchmark 10-year Japanese government bond yield hit a fresh 10-year high ahead of a central bank meeting next week, according to Reuters data.

Organizations: Chartered, Standard Chartered, BNP, TotalEnergies, Volvo, Volkswagen, Carrefour, Saab, Wacker Chemie, Investors, Facebook, Meta, European Central Bank —, Reuters, Treasury Locations: London, Turkey, Asia, Pacific

☆ Morning Bid: Stocks ease in nervous Gaza wait
▼ + stars: | 2023-10-16 | by ( ) www.reuters.com time to read: +3 min

Israeli soldiers gather on and around a tank near Israel's border with the Gaza Strip, in southern Israel October 15, 2023. ECB speakers are out in force this week, including Bank of Spain Governor Pablo Hernández de Cos on Monday, when the euro zone also releases trade data. It will be a busy week for BoE rhetoric as well, starting with the central bank's chief economist, Huw Pill, on Monday. There's lots of important British data, with house prices later today, jobs and wage figures on Tuesday, and CPI on Wednesday. Fed Chair Jerome Powell's speech at the Economic Club of New York this Thursday, just before the start of the central bank's blackout period, is probably the most anticipated bit of central bank speak for the week.

Persons: Ronen, Kevin Buckland, Brent, Antony Blinken, Joe Biden, Pablo Hernández de Cos, BoE, Huw Pill, Jerome Powell's, Goldman Sachs, Morgan Stanley, Cos, Edmund Klamann Organizations: REUTERS, Japan's Nikkei, Bank of Spain, U.S . Federal Reserve, Economic, of New, Netflix, Thomson Locations: Gaza, Israel, Iran, Asia, Europe, of New York, U.S

☆ Morning Bid: Chips are down
▼ + stars: | 2023-09-18 | by ( ) www.reuters.com time to read: +2 min

The global chip sector is stealing the spotlight from major central banks, after the world's top contract chipmaker raised concerns over demand, hitting share prices of semiconductor stocks. In a week packed with central bank meetings, decisions are also due from the U.S. Federal Reserve on Wednesday and Bank of England on Thursday. After the European Central Bank's fireworks last week, the euro will be closely watched as a signal for whether the backlash from more hawkish ECB members is gaining any traction with traders and investors. The BOE is likely to hike interest rates for the 15th time later in the week, while the Fed seems set for a hawkish pause. One more little complication is the steady grind higher in oil prices to new highs that is stoking inflation concerns, just as central banks in most developed economies are at or approaching the end of their tightening cycles.

Persons: Vidya Ranganathan, chipmaker, There's, Kazuo Ueda, BOE, Guindos, Panetta, Sam Holmes Organizations: Vidya, Reuters, General Motors, Ford, Chrysler, International, Co, of, U.S . Federal Reserve, Bank of England, ECB, Thomson Locations: Asia, Detroit

A man walks in front of the headquarters of Bank of Japan in Tokyo, Japan, January 18, 2023. REUTERS/Issei Kato/File Photo Acquire Licensing RightsSept 18 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist. Attention this week turns to the Federal Reserve and Bank of England policy meetings, and in Asia, the BOJ on Friday. The currency and JGB markets are sending different signals, and both will be seeking more clarity from the BOJ on Friday. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

Persons: Issei Kato, Jamie McGeever, Kazuo Ueda's hawkish, Bond, Li, Guindos, Panetta, Diane Craft Organizations: Bank of Japan, REUTERS, The, of, ECB, Federal Reserve, Bank of, Thomson, Reuters Locations: Tokyo, Japan, Asia, Taiwan, Philippines, Indonesia, Malaysia, Hong Kong, Bank of England, Singapore, China, Moscow

☆ Stubborn euro zone inflation fails to settle ECB rate debate
▼ + stars: | 2023-08-31 | by ( Balazs Koranyi | ) www.reuters.com time to read: +4 min

The ECB has raised rates at its fastest pace on record in the past year, taking them to a more than two-decade high. "We still do not expect the Governing Council to raise key rates further at its September meeting." "The latest inflation figures raise the probability of a new increase in interest rates in September," Diego Iscaro at S&P Global Market Intelligence said. "However, this is far from a done deal, and a rapidly deteriorating economic background will still give doves in the ECB's Governing Council plenty of ammunition to argue for a pause." "This decline could counteract our efforts to bring inflation back to target in a timely manner."

Persons: Eric Gaillard, Robert Holzmann, Holzmann, Christoph Weil, Diego Iscaro, Isabel Schnabel, Schnabel, Balazs Koranyi, Catherine Evans Organizations: REUTERS, Rights, Central Bank, ECB, Reuters Global Markets, P Global Market Intelligence, Thomson Locations: Nice, France, Austria's, ECB's, Frankfurt

☆ Dollar drops on jobs data, yen rises from 10-month low
▼ + stars: | 2023-08-29 | by ( Karen Brettell | ) www.reuters.com time to read: +4 min

The Japanese yen also gained, after earlier falling to a 10-month low. The dollar briefly reached an almost 10-month high against the Japanese yen earlier on Tuesday, before dropping on the jobs data. The Bank of Japan remains an outlier among global central banks with its loose monetary policy, even as it slowly shifts away from yield curve control. “It is moving away from excessively loose monetary policy, but it’s doing so at a very slow and measured pace,” Rai said. Japan intervened in currency markets last September when the dollar rose past 145 yen, prompting the Ministry of Finance to buy the yen and push the pair back to around 140 yen.

Persons: Dado Ruvic, Jerome Powell, Bipan Rai, ” Rai, “ It’s, Charu, Kazuo Ueda, Lee Hardman, Karen Brettell, Alun John, Sharon Singleton, Jonathan Oatis Organizations: REUTERS, U.S, Action Economics, Federal Reserve, CIBC Capital Markets, Bank of Japan, Ministry of Finance, Saxo, Jackson, European Central Bank, Thomson Locations: North American, Toronto, U.S, Japan, London

This will leave investors guessing whether another rate hike is coming or if July marks the end of the ECB's fastest-ever tightening spree. "The Governing Council will continue to follow a data-dependent approach to determining the appropriate level and duration of restriction," the ECB added. While markets had fully priced in another rate hike just a few weeks ago, a growing number of investors are betting that Thursday's move will be the last. More tightening would however be consistent with comments from a host of policymakers, including ECB board member Isabel Schnabel, that raising rates too far would still be less costly than not lifting them high enough. This is a key reason why the balance of expectations has started to shift away from another rate hike, with economists increasingly focusing on how long rates will stay high.

Persons: Isabel Schnabel, Jerome Powell, Christine Lagarde, Catherine Evans Organizations: European Central Bank, ECB, U.S . Federal Reserve, Thomson Locations: FRANKFURT

☆ Morning Bid: Markets brace for Fed decision, earnings flood
▼ + stars: | 2023-07-26 | by ( ) www.reuters.com time to read: +2 min

Investors will be listening carefully to Chair Jerome Powell for indications of whether or not another interest rate hike is in the pipeline. The Fed's communication could set the tone for markets ahead of policy decisions from the European Central Bank (ECB) on Thursday and the Bank of Japan (BOJ) on Friday. Reuters GraphicsEuro zone June M3 annual growth and lending data on Wednesday are unlikely to affect markets ahead of the ECB's decision. Chinese stock markets were mostly lower on Wednesday following a steep rally the day before. China's blue-chip CSI300 (.CSI300) index was down 0.3% while the CSI 300 Real Estate index gained 0.2%.

Persons: Brigid Riley, Jerome Powell, HSI, Sonali Desai, Edmund Klamann Organizations: Federal Reserve, Federal, Market, European Central Bank, Bank of Japan, ECB, Reuters, Fisher, Union Pacific Corp, eBay, Boeing, Microsoft, Carrefour, Danone, GSK, CSI, CPI, Reserve Bank of Australia, U.S, Fed, Thomson Locations: United States, U.S, Europe, France, Asia, China

At present, minimum reserves are remunerated at the ECB's deposit rate, now 3.5% after a string of interest rate hikes to tame inflation. The sources said some staff advocate leaving an adjustment of the corridor until the ECB ends its current tightening cycle, with the final move a change in the deposit rate. The ECB has given itself a year-end deadline to decide, the sources said, although details could take longer to work out. Now, the deposit rate effectively sets an interest rate floor, similar to the way U.S. Federal Reserve rates function and the sources indicated this was likely to remain the case. Such a "demand driven floor-system" would let the ECB add excess liquidity as needed as opposed to running a permanently oversized balance sheet.

Persons: Isabel Schnabel, Catherine Evans Organizations: Staff, Senior European Central Bank, Reuters, Market, ECB, Federal, Bank of England, Thomson Locations: Helsinki, SINTRA, Portugal, Sintra, Finland

☆ ECB's De Cos sees another 25 bps rate hike in July, no certainty afterwards
▼ + stars: | 2023-06-23 | by ( ) www.reuters.com time to read: +1 min

MADRID, June 22 (Reuters) - The European Central Bank will need to raise interest rates by another 25 basis points in July to combat inflation but the path afterwards remains unclear, ECB policymaker Pablo Hernandez de Cos said on Friday. De Cos added that given the "high uncertainty ... we will continue to take our decisions depending on the data and, in particular, on the aggregate assessment of the inflation outlook, the dynamics of underlying inflation." Euro zone inflation has been moderating for months, courtesy of lower energy prices and the steepest increase in rates in the ECB's 25-year history. But it remains unacceptably high for the ECB at 6.1% in May, with underlying price growth only just starting to slow despite signs economic growth is stagnating. Reporting by Jesús Aguado; additional reporting by Emma Pinedo; editing by David Latona and Conor HumphriesOur Standards: The Thomson Reuters Trust Principles.

Persons: policymaker Pablo Hernandez de Cos, Christine Lagarde, De Cos, Jesús Aguado, Emma Pinedo, David Latona, Conor Humphries Organizations: European Central Bank, policymaker, ECB, Thomson Locations: MADRID, Spanish, Santander

☆ Recent rate hikes should also be passed on to savers, ECB's De Guindos says
▼ + stars: | 2023-06-22 | by ( ) www.reuters.com time to read: +2 min

MADRID, June 22 (Reuters) - Recent interest rate hikes by the European Central Bank should be fully transmitted to savers and reflected in higher deposit rates, ECB Vice-President Luis de Guindos said on Thursday. "A full transmission (of monetary policy) requires the remuneration of savings," De Guindos told a financial event in the northern Spanish city of Santander. Spanish banks on Tuesday however pushed back against a government call to start paying higher rates on deposits. Lenders maintain that a lower deposit rate is partly the result of excess liquidity in the sector and deny claims of a lack of competition in Spain's relatively concentrated banking sector. This would leave them with around 40 billion euros of those funding lines at the ECB.

Persons: Luis de Guindos, De Guindos, DBRS, Jesús Aguado, Jan Harvey Organizations: European Central Bank, ECB, Reuters, Thomson Locations: MADRID, Spanish, Santander, Spain, Madrid, TLTROs

☆ ECB policymakers line up behind rate hike plans
▼ + stars: | 2023-06-16 | by ( ) www.reuters.com time to read: +3 min

Underlying inflation eased to 5.3% in May, but a big chunk of the drop was due to a one-off administrative discount in German transport prices. Wunsch has said in the past that the ECB's deposit rate could hit 4% if underlying inflation did not moderate. Joining the chorus behind rate hikes, Estonian central bank chief Madis Muller said more rate action is needed. "Euro zone interest rates have not yet peaked," Muller said in a statement. "The ultimate goal is clear for the central bank - we need to quickly get the price rise under control."

Persons: Joachim Nagel, Pierre Wunsch, Wunsch, Austria's Robert Holzmann, Gediminas Simkus, Madis Muller, " Muller, Balazs Koranyi, Andrius Sytas, Julia Payne, Francois Murphy, Terje Solsvik, Alex Richardson, Toby Chopra, Jan Harvey Organizations: Central Bank, ECB, Thomson Locations: FRANKFURT, Belgian, U.S, Estonian

☆ ECB to hike rates in June and July to break sticky inflation - Reuters poll
▼ + stars: | 2023-06-08 | by ( Prerana Bhat | ) www.reuters.com time to read: +4 min

Price pressures and inflation expectations have moderated, but not by enough to deter the ECB from continuing its most aggressive tightening cycle on record. The ECB slowed the pace of its rate rises to 25 basis points at its May meeting after a flurry of 75 and 50 basis point moves. About three-quarters of economists, 43 of 59, forecast another 25 basis point rate hike in July, a stance hardly changed from a May poll. "A 25 basis point rate hike looks like a done deal for next week's meeting," said Carsten Brzeski, global head of macro at ING. "The ECB might not be convinced by the September meeting inflation is declining sufficiently to pause," he said.

Persons: Dado Ruvic, Price, Christine Lagarde, Carsten Brzeski, Mark Wall, Prerana Bhat, Milounee Purohit, Ross Finley, Jonathan Cable, Susan Fenton Organizations: REUTERS, European Central Bank, Reuters, ECB, ING, U.S . Federal, Deutsche Bank, Thomson Locations: BENGALURU, Germany, Europe

☆ ECB's de Guindos warns financial markets are vulnerable to a sharp sell-off
▼ + stars: | 2023-05-31 | by ( Elliot Smith | ) www.cnbc.com time to read: +1 min

Financial markets could face a sharp downturn in the event of any further shocks to the global economy, European Central Bank Vice-President Luis de Guindos told CNBC on Wednesday. Earlier on Wednesday, the ECB published its May Financial Stability Review, saying that the euro area's stability outlook remained fragile in the aftermath of recent turmoil in the banking sector, which saw the failure of several U.S. regional banks and the emergency takeover of Credit Suisse by UBS. Global stock markets made a robust start to 2023, given falling energy prices, China's reopening and the surprising resilience of the euro zone economy — driving equity valuations back above historical averages, the ECB highlighted. This reversed abruptly in late February and March as a hawkish tone from central banks and unexpected stress in the banking sector roiled investors around the world. De Guindos said current market positioning rendered stocks vulnerable to any further macro surprises.

Persons: Luis de Guindos, De Guindos, de Guindos Organizations: European Central Bank, CNBC, ECB, Credit Suisse, UBS

☆ ECB's Schnabel sees more rate hikes until core inflation declines too
▼ + stars: | 2023-05-09 | by ( ) www.reuters.com time to read: +1 min

REUTERS/Kai PfaffenbachFRANKFURT, May 9 (Reuters) - The European Central Bank will keep raising borrowing costs until it sees core inflation decline sustainably, ECB board member Isabel Schnabel said on Tuesday, adding market expectations for rate cuts were misplaced. Schnabel backed the ECB's decision last week to slow down the pace of rate hikes but said these will continue until it sees a sustained fall in core prices, which typically exclude food and energy due to their wild swings. "We will raise rates decisively until it becomes clear that core inflation is also declining on a sustained basis." She added rates will probably stay high for long and the rate cuts expected by some market participants this year were "highly unlikely". While supply-side shocks from bottlenecks and energy prices continued to fade, the labour market was strong, wage growth was picking up and corporate profit margins were high, Schnabel added.

Both hiked interest rates a quarter point - but only the ECB said more was to come. Without committing to it, the Fed signalled a pause in its 13-month, five percentage point tightening campaign. Money markets do partly agree with Lagarde - seeing one more quarter point rate rise in the pipeline. They now see the so-called terminal ECB rate at 3.5% in September - still a chunky 175 bps below peak Fed rates if you assume that at 5.25%, those have now reached the end of the line. "The extent of policy tightening delivered by the ECB to date is already sufficient to cause a recession," said Fidelity International's Anna Stupnytska.

☆ ECB policymakers promise more hikes to beat inflation
▼ + stars: | 2023-05-05 | by ( ) www.reuters.com time to read: +3 min

"The essence of the effort has been done, although there will probably be a few more rate hikes," Villeroy told French broadcaster Radio Classique. Villeroy explained Thursday's smaller rate increase by saying higher rates were beginning to have an effect on inflation. And two ECB surveys also published on Friday showed economists had cut their inflation forecasts for this year and the next - to 5.6% and 2.6% respectively - and that companies were moderating the pace of price hikes. The ECB aims to bring inflation back to 2% by 2025, "maybe even by the end of 2024", he added. "We will keep rates high for a sufficiently long time to get inflation back to 2%," the Lithuanian central bank chief said.

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