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☆ ECB hawk Schnabel scraps more rate hikes after 'remarkable' inflation drop
▼ + stars: | 2023-12-05 | by ( ) www.reuters.com time to read: +4 min

Euro zone inflation tumbled to 2.4% last month from above 10% a year earlier after a record string of rate hikes. Schnabel, who had insisted just a month ago that rate hikes must remain an option because the "last mile" of the inflation fight may be the toughest, said she had shifted stance after three unexpectedly benign inflation readings in a row. "The most recent inflation number has made a further rate increase rather unlikely." "The recent inflation print has given me more confidence that we will be able to come back to 2% no later than 2025." Schnabel said weak growth as a result of the ECB's rate hikes is helping the inflation fight but that a deep or prolonged recession is unlikely, with recent survey data supporting expectations for a recovery.

Persons: Isabel Schnabel, Jim Urquhart, Schnabel, John Maynard Keynes, Christine Lagarde, Francois Villeroy de, Yannis Stournaras, Joachim Nagel, Balazs Koranyi, Catherine Evans Organizations: European Central Bank, Teton, Jackson, REUTERS, Rights, ECB, Reuters, Bank of Greece, Thomson Locations: Jackson , Wyoming, U.S, French, Francois Villeroy de Galhau

☆ Euro zone inflation tumble pits ECB against markets
▼ + stars: | 2023-11-30 | by ( Balazs Koranyi | ) www.reuters.com time to read: +5 min

Inflation has dropped quickly towards the ECB's 2% target from levels above 10% just a year ago but policymakers have cautioned against excessive optimism. The rapid inflation slowdown puts the euro zone central bank and investors on a collision course as the two appear to see greatly different paths ahead, both for consumer prices and ECB interest rates. "And if the recent trends in inflation and growth continue then 2024 will be the year when the ECB implements a pirouette in monetary policy." "The market is therefore right to start looking at rate cuts for 2024. Some economists argue that modelling current inflation is exceptionally difficult because corporate profits are the main driver, not wages as in normal bouts of rapid inflation.

Persons: Sarah Meyssonnier, Kamil Kovar, Yannis Stournaras, Fabio Panetta, Panetta, Christine Lagarde's, Bert Colijn, Balazs Koranyi, Catherine Evans Organizations: REUTERS, ECB, Moody's, Bank of Italy, ING, Thomson Locations: Paris, France, FRANKFURT

For much of this year central banks have successfully pushed back against rate cut bets. "I believe the Fed will act rationally and begin to cut rates by the end of next year, but we can't rule out the scenario that the Fed is not going to cut rates and just let the ramifications of recession do what they do." Reuters GraphicsSHIFT NEARINGMarkets now fully price in a 25 basis point U.S. rate cut in May, having seen a 65% chance earlier this week. "There are now committee members in all three (banks) willing to talk about rate cuts next year," said Chris Jeffery, head of rates and inflation strategy at LGIM. "The ECB should begin to ease policy as soon as April 2024, with risks that a more sinister downturn in growth could warrant a rate cut as soon as March," he said.

Persons: Jonathan Ernst, ramping, It's, Nate Thooft, Goldman, Christopher Waller, Huw Pill, Yannis Stournaras, Chris Jeffery, we'd, Dario Perkins, Simon Harvey, Yoruk, Naomi Rovnick, Harry Roberston, Davide Barbuscia, Ira Iosebasvili, Saqib Iqbal Ahmed, Dhara Ranasinghe, Catherine Evans Organizations: . Federal, REUTERS, ECB, U.S . Federal Reserve, European Central Bank, Manulife Investment Management, Treasury, Graphics, Bank of England, Deutsche, Lombard, Traders, Yoruk Bahceli, Thomson Locations: Washington, United States, Europe, Goldman Sachs, Greek, Amsterdam, London

☆ Central banks look to have hit peak rates. Here's how markets think they'll come down
▼ + stars: | 2023-11-07 | by ( Elliot Smith | ) www.cnbc.com time to read: +6 min

The U.S. Federal Reserve, European Central Bank and the Bank of England dramatically hiked rates over the last 18 months in a bid to tame runaway inflation. Reid also highlighted that this is the seventh time this cycle that markets have notably reacted on dovish speculation. "Clearly rates aren't going to keep going up forever, but on the previous 6 occasions we saw hopes for near-term rate cuts dashed every time. In clear, waiting for inflation to reach 2% before cutting rates would be 'overkill,'" Moëc said. However, minutes from last week's meeting reiterated the Monetary Policy Committee's expectations that rates will need to stay higher for longer, with U.K. CPI holding steady at 6.7% in September.

Persons: Jerome Powell, Brendan McDermid, nonfarm payrolls, DBRS Morningstar, Jim Reid chalked, Reid, we've, Gilles Moëc, Moëc, Christine Lagarde, Yannis Stournaras Organizations: Federal Reserve, New York Stock Exchange, U.S . Federal Reserve, European Central Bank, Bank of, Fed, PCE, DBRS, Deutsche Bank, ECB, AXA, National Bank of Greece, of, Bank of England, CPI, BNP Locations: New York City, Bank of England, U.S, Europe

☆ Analysis: Middle East throws central banks yet more unknowns
▼ + stars: | 2023-10-20 | by ( Mark John | ) www.reuters.com time to read: +5 min

Now, to complicate matters for a professional caste which prides itself on being data-driven, the Middle East is throwing a new set of real but unquantifiable risks into their equations. Unless the picture changes dramatically in coming days, the European Central Bank, U.S. Federal Reserve, Bank of England and Bank of Japan are already expected to keep their policy rates on hold in meetings over the next two weeks. ECB rate-setter Yannis Stournaras, the governor of the Greek central bank, argued that Europe had broadly managed to absorb the effects of rising energy costs triggered by the Ukraine war and hoped it could do the same if further shocks emerged. For now, the conflict remains largely confined to Israel and Gaza, something S&P Global Market Intelligence said in a study this week was already "muddying the waters" for central banks. As the Fed's Powell put it: "Our institutional role at the Federal Reserve is to monitor these developments for their economic implications, which remain highly uncertain".

Persons: Jerome Powell, David Westin, Brendan McDermid, Powell, Huw Pill, Yannis Stournaras, Tetsuya Hiroshima, Fed's Powell, Dan Burns, Balazs Koranyi, Francesco Canepa, Maria Martinez, Leika, Kevin Yao, David Milliken, Tomasz Janowski Organizations: Federal, Anchor, Bloomberg, Street, Economic, of New, REUTERS, Bank of England, International Monetary Fund, European Central Bank, U.S, Federal Reserve, Bank of Japan, Fed, ECB, Reuters Graphics, Reuters, Tokai, Toyota Motor Corp, P Global Market Intelligence, Thomson Locations: of New York, New York City, U.S, Israel, Ukraine, Iran, Hormuz, Europe, United States, Japan, Gaza, Washington, Frankfurt, Berlin, Tokyo, Beijing, London

Member of the ECB governing council and Governor of the Bank of Greece, Yannis Stournaras talks during an interview with Reuters in Athens, Greece, October 11, 2023. In the interview, Greece's central bank governor also warned about the risk of stagflation from a prolonged war in the Middle East and spoke against increasing the amount of reserves that banks must hold. He countered calls by some of his colleagues for an early end to the ECB's last surviving bond-buying scheme, saying the central bank may need that firepower in a geopolitical environment fraught with risks. The ECB all but stopped buying bonds last year after a sudden surge in inflation forced it to unwind a decade of stimulus policies. "For the moment I see no reason why we should tighten monetary policy now because increasing the minimum requirements will imply monetary policy tightening," Stournaras said.

Persons: Yannis Stournaras, Louisa Gouliamaki, Rome, ECB policymaker Yannis Stournaras, Stournaras, Francesco Canepa, Mark Potter Organizations: Bank of Greece, Reuters, REUTERS, European Central Bank, ECB policymaker, ECB, Investors, European Commission, Thomson Locations: Athens, Greece, ATHENS, Israel, Palestine, Italy, Rome

☆ ECB's Stournaras interview with Reuters
▼ + stars: | 2023-10-12 | by ( ) www.reuters.com time to read: +9 min

Member of the ECB governing council and Governor of the Bank of Greece, Yannis Stournaras talks during an interview with Reuters in Athens, Greece, October 11, 2023. The rise in bond yields means that financial conditions are even tighter Than before given monetary policy decisions. A: I think we should act only based on monetary policy reasons and justifications. And for the moment I see no reason why we should tighten monetary policy now because increasing the minimum requirements will imply monetary policy tightening. So, we have a pipeline of monetary policy tightening which has been decided in the past.

Persons: Yannis Stournaras, Louisa Gouliamaki, European Central Bank policymaker Yannis Stournaras, it's, I'm, reinvestments, Francesco Canepa Organizations: Bank of Greece, Reuters, REUTERS, Rights, European Central Bank policymaker, ECB, European Commission, Governing, Thomson Locations: Athens, Greece, Palestine, Russia, Ukraine, Iran, China, Europe, Israel, Italy

☆ ECB’s Stournaras urges governments to help bring down inflation, Bloomberg reports
▼ + stars: | 2023-09-17 | by ( ) www.reuters.com time to read: +1 min

Central Bank Governor Yannis Stournaras poses for a photo in his office at the bank’s headquarters in Athens, Greece, October 22, 2021. REUTERS/Louiza Vradi Acquire Licensing RightsSept 17 (Reuters) - European Central Bank Governing Council member Yannis Stournaras said governments must do their part in reining in consumer prices after borrowing costs reached a level that may well be their peak, Bloomberg News reported on Sunday. “Monetary policy has done its part to fight inflation,” Stournaras told Bloomberg in an interview, adding that now it was up to fiscal policy to "take out some of the heat." “A more restrictive fiscal stance wouldn’t only be a welcome strategic complement to ECB policy but also help improve the credibility of public debt and loosen the nexus with banks,” the Greek central bank chief said. Reporting by Kanjyik Ghosh in Bengaluru Editing by Tomasz JanowskiOur Standards: The Thomson Reuters Trust Principles.

Persons: Central Bank Governor Yannis Stournaras, Louiza, Yannis Stournaras, ” Stournaras, wouldn’t, Stournaras, Francois Villeroy de Galhau, Kanjyik Ghosh, Tomasz Janowski Organizations: Central Bank Governor, REUTERS, Central Bank Governing, Bloomberg, ECB, Thomson Locations: Athens, Greece, reining, Bengaluru

☆ Sterling takes a beating, dollar gains ground
▼ + stars: | 2023-07-20 | by ( ) www.cnbc.com time to read: +3 min

U.S. dollar bills, British GDP and Euro currency bank notes are pictured on September 27, 2022 in Bath, England. Sterling was struggling to recover from a sharp fall on Thursday following U.K. inflation data that undershot market expectations, while the dollar regained its footing after a steep decline last week that analysts said was overblown. "The market I think is a bit more reasonable now with its expectations for rate hikes by the BoE. "We thought (the fall) was too strong, so it looks like the dollar has regained some of those losses," said Capurso. The Japanese yen rose 0.1% to 139.56 per dollar, while the Australian dollar was last 0.16% higher at $0.6782, ahead of the country's employment data later on Thursday.

Persons: Sterling, BoE, Joseph Capurso, Yannis Stournaras, Mel Siew Organizations: Bank of England, Traders, Commonwealth Bank of Australia, Central Bank, U.S, Muzinich Locations: Bath, England, Asia, China

☆ Aussie surges after strong jobs data; China's yuan jumps
▼ + stars: | 2023-07-20 | by ( Rae Wee | ) www.reuters.com time to read: +4 min

"Ultimately, it's another strong set of employment figures which keeps the pressure on a data-dependant (Reserve Bank of Australia) to potentially hike rates in August." The offshore yuan last bought 7.1901 per dollar, while the onshore yuan strengthened past 7.18 per dollar to a session-high of 7.1620. RATES OUTLOOKIn the broader currency market, sterling was nursing deep losses after a sharp fall in the previous session following Britain's inflation data, which undershot market expectations. "The market I think is a bit more reasonable now with its expectations for rate hikes by the BoE. "We thought (the fall) was too strong, so it looks like the dollar has regained some of those losses," said CBA's Capurso.

Persons: David Gray, Matt Simpson, it's, Ken Cheung, BoE, Joseph Capurso, Yannis Stournaras, CBA's Capurso, Rae Wee, Sam Holmes, Jamie Freed Organizations: REUTERS, Australian, New Zealand, Bank of Australia, prudential, U.S ., People's Bank of, Mizuho Bank, Bank of England, Traders, Commonwealth Bank of Australia, Central Bank, U.S, Thomson Locations: Sydney, Australia, SINGAPORE, China, Asia

☆ Take Five: The only way is up
▼ + stars: | 2023-06-23 | by ( ) www.reuters.com time to read: +6 min

June 23 (Reuters) - It's been a turbulent week or two for markets, with one central bank after another making it very clear the only way for rates right now is up as inflation tightens its grip on the global economy. Bad news could be taken as a positive, if traders see it as a way of pushing authorities to offer more support to the economy - as long as it eventually arrives. Make your way to the foothills of Portugal's Sintra mountains from Monday through Wednesday. The agenda is, of course, inflation, inflation, inflation. Many expect initial attempts to talk the currency higher - "jawboning", in central bank jargon - before considering whether direct intervention is needed.

Persons: It's, Yoruk, Lewis Krauskopf, Naomi Rovnick, Amanda Cooper, it's, Big Tech's, CHRISTINE, Christine Lagarde, Yannis Stournaras, Jan Harvey Organizations: Investors, Federal, Credit Suisse, Big Tech, Federal Reserve, European Central Bank, Traders, ECB, Reuters Graphics Reuters, Analysts, Thomson Locations: Portugal, Rae Wee, Singapore, Amsterdam, New York, London, U.S, Beijing, China, Portugal's Sintra, SWEDEN, Swedish

Ahead of an election on May 21, a cost-of-living crisis that is eroding earnings is foremost in voters' minds. For Klaoudatou it means voting for anyone but the incumbent conservative New Democracy or the opposition leftist Syriza. Reuters GraphicsThree international bailouts saved Greece from toppling out of the euro zone during a decade-long debt crisis that peaked in 2015. "Εven during the crisis - and this is the joke - I didn't think so much before spending a single extra euro," Klaoudatou told Reuters. Reuters GraphicsPAYCHECK BARELY GETS TO PAYCHECKOne in two Greek households could barely get by on their monthly income last year.

☆ 'We are close to the end of the tightening cycle,' Bank of Greece governor says
▼ + stars: | 2023-03-20 | 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 Email'We are close to the end of the tightening cycle,' Bank of Greece governor saysBank of Greece Governor Yannis Stournaras discusses the latest ECB monetary policy decision and the state of the European banking system.

☆ Banking turmoil could help euro doves cry victory
▼ + stars: | 2023-03-14 | by ( Francesco Guerrera | ) www.reuters.com time to read: +3 min

That’s the annual growth in euro zone inflation recorded in February, and it sits well above the ECB’s 2% target. The demise of Silicon Valley Bank and Signature Bank (SBNY.O) was partly due to rising interest rates and sparked fears of a global banking rout. Investors are evenly split between those expecting a 25 basis point hike and those backing a 50 basis point raise on Thursday, according to probabilities derived from market prices by Refinitiv. As for GDP, the central bank in December forecasted a rebound in growth from 0.5% this year to 1.9% in 2024. Reuters Graphics Reuters GraphicsFollow @guerreraf72 on TwitterCONTEXT NEWSThe European Central Bank announces its interest rate decision and new economic forecasts on March 16.

This would take the rate the ECB pays on bank deposits to the highest level since November 2008, after a steady climb from a record low of -0.5% in July. Reuters GraphicsThe ECB said in December that rates would be increased "at a steady pace" until it is happy inflation is heading back down to its 2% target. BNP Paribas also thought the ECB might take out the reference to a "steady pace" of rate hikes or offset it so that a 50-basis-point increase would be "not predetermined (but) still a possible outcome". And an ECB survey showed banks were tightening access to credit by the most since the 2011 debt crisis - usually the harbinger of lower growth and slowing inflation. To some observers, this meant the ECB would be wise not to commit to any future policy move.

[1/3] Signage is seen outside the European Central Bank (ECB) building, in Frankfurt, Germany, July 21, 2022. The Dutch and Slovak central bank governors gave explicit support for a bigger move in March while ECB President Christine Lagarde also appeared to back such an increase. But it is not a reason to slow the tempo of raising interest rates," Kazimir said in a statement on Monday. "I am convinced that we need to deliver two more hikes by 50 basis points." Economists polled by Reuters expect the ECB to deliver 50 basis point interest rate rises at each of its next two meetings.

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