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☆ Wall St mixed, dollar gains after inflation data
▼ + stars: | 2023-08-31 | by ( Stephen Culp | ) www.reuters.com time to read: +4 min

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., August 29, 2023. European shares reversed earlier gains to close lower as falling consumer staples and luxury stocks offset gains in financials and real estate. Emerging market stocks lost 0.78%. The dollar index (.DXY) rose 0.41%, with the euro down 0.71% to $1.0846. U.S. Treasury yields were last a bit lower in choppy trading after data reinforced expectations that the Fed will hold interest rates steady in September.

Persons: Brendan McDermid, Dow, Joseph Sroka, we’ve, Sroka, Brent, Stephen Culp, David Evans, Nick Zieminski Organizations: New York Stock Exchange, REUTERS, Federal Reserve, Nasdaq, Commerce, PCE, CPI, PPI, Fed, Dow Jones, Japan's Nikkei, European Central Bank, Treasury, Thomson Locations: New York City, U.S, Atlanta, financials, Asia, Pacific, Japan, OPEC

☆ Euro slips as ECB policymaker takes cautious tone
▼ + stars: | 2023-08-31 | by ( ) www.cnbc.com time to read: +3 min

The lettering Euro can be seen on a 1 euro coin, taken on 10 August 2023, in Baden-Württemberg, Rottweil. The euro edged back on Thursday after comments from German policymaker Isabel Schnabel failed to give firm clues on whether the European Central Bank will raise rates in September. ECB rate-setter Schnabel said that euro zone growth was weaker than predicted but that does not necessarily void the need for more rate hikes. "We've heard the most influential hawk on the Governing Council take on a much more cautious tone," said Michael Brown, analyst at Trader X. "I think the fact she is flagging downside risks to growth is putting some downside pressure on the euro this morning."

Persons: policymaker Isabel Schnabel, Schnabel, We've, Michael Brown, Chris Turner Organizations: European Central Bank, ECB, Trader, Traders, Federal, Commerce Department, UK, CEE Locations: Baden, Tokyo

U.S. bond investors nonetheless dialled back their bets of a rate hike in November and December following Powell's remarks, though Treasury yields traded near break-even by late morning. The yield on 10-year Treasury notes was steady at 4.2314% and the two-year yield, which reflects interest rate expectations, rose to 5.0735%. "We've seen a back-off in ECB rate hike expectations. Boston Fed President Susan Collins said on Yahoo Finance's video channel that rates may be near or at a peak, "but certainly additional increments are possible." Tokyo consumer price data on Friday, which front-runs nationwide figures, showed inflation remained well above the Bank of Japan's target.

Persons: Toby Melville, Jerome Powell, Powell, David Sadkin, Dow Jones, Christine, Lagarde, Ben Laidler, Patrick Harker, Susan Collins, Shaun Osborne, Joseph Capurso, Kazuo Ueda, Jackson, Brent, Samuel Indyk, Kevin Buckland, Jacqueline Wong, Mark Potter, Chizu Nomiyama, Susan Fenton, Diane Craft, Cynthia Osterman Organizations: London Stock Exchange Group, City of, REUTERS, Federal Reserve, Bel Air Investment Advisors, Nasdaq, European Central Bank, ECB, Reuters, Philadelphia Fed, CNBC, Boston, Yahoo, U.S, Scotiabank, Bank of, Bank of Japan, CBA, West Texas, Thomson Locations: City, City of London, Britain, Jackson Hole , Wyoming, U.S, Asia, Tokyo

☆ Dollar steady as Fed's Powell says higher rates may be needed
▼ + stars: | 2023-08-25 | by ( Saqib Iqbal Ahmed | ) www.reuters.com time to read: +4 min

[1/2] U.S. dollar banknotes are seen in this illustration taken March 10, 2023. The U.S. dollar index - which measures the currency against six major counterparts - was about flat at $104.06 after rising to 104.44, its highest since June 1. Interest rate futures tied to the Fed's policy rate on Friday priced in a more than even chance of tightening at either the November or December policy meetings. On Friday, the euro was 0.01% lower against the dollar at $1.08085. Against the yen , the dollar was up 0.31% to 146.28.

Persons: Dado Ruvic, Jerome Powell, Powell, Karl Schamotta, Ben, Bernanke, Mario, Draghi, Schamotta, bitcoin, Saqib Iqbal Ahmed, Dhara Ranasinghe, Ankur Banerjee, Kirsten Donovan, Christina Fincher, Nick Zieminski, Jonathan Oatis Organizations: REUTERS, U.S, Federal, European Central Bank, Global Research, Reuters, of, Thomson Locations: Jackson Hole , Wyoming, U.S, Toronto, Britain, London, Singapore

☆ Shares whipsaw as Fed weighs inflation risks, yields steady
▼ + stars: | 2023-08-25 | by ( Samuel Indyk | ) www.reuters.com time to read: +5 min

If you're a bear, you heard him say we're going to be restrictive, and we might hike rates," said David Sadkin, president at Bel Air Investment Advisors. U.S. rates investors nonetheless dialled back their bets of a rate hike in November and December following Powell's remarks, though Treasury yields traded near break-even by late morning. "We've seen a back off in ECB rate hike expectations. Boston Fed President Susan Collins said on Yahoo Finance's video channel that rates may be near or at a peak, "but certainly additional increments are possible." Tokyo consumer price data on Friday, which front-runs nationwide figures, showed inflation remained well above the Bank of Japan's target.

Persons: Toby Melville, Jerome Powell, Powell, David Sadkin, Dow Jones, Christine, Lagarde, Ben Laidler, Patrick Harker, Susan Collins, Shaun Osborne, Joseph Capurso, Kazuo Ueda, Jackson, Brent, Samuel Indyk, Kevin Buckland, Jacqueline Wong, Mark Potter, Chizu Nomiyama, Susan Fenton Organizations: London Stock Exchange Group, City of, REUTERS, Federal Reserve, Bel Air Investment Advisors, Nasdaq, European Central Bank, Reuters, ECB, Philadelphia Fed, CNBC, Boston, Yahoo, U.S, Scotiabank, Bank of, Bank of Japan, CBA, West Texas, Thomson Locations: City, City of London, Britain, Jackson Hole , Wyoming, U.S, Asia, Tokyo

☆ Euro knocked by ECB rate pause talk, dollar cautious before Powell
▼ + stars: | 2023-08-25 | by ( Dhara Ranasinghe | ) www.reuters.com time to read: +3 min

[1/2] Euro currency bills are pictured at the Croatian National Bank in Zagreb, Croatia, May 21, 2019. The euro hit its lowest since mid-June at around $1.0766 before drifting higher. The dollar index , which measures the U.S. currency against six others, rose to 104.31, the highest since June 6, but edged lower during London trade. Powell speaks at the Jackson Hole Economic Policy Symposium at 1405 GMT, while ECB chief Christine Lagarde speaks at the same gathering later in the day. Sterling touched its lowest level since June at around $1.2560 before recovering to around $1.2610 to trade just a touch softer on the day.

Persons: Antonio Bronic, Fed's Powell, Jerome Powell, Powell, Christine Lagarde, Jeremy Stretch, Sterling, Marc Chandler, Dhara Ranasinghe, Ankur Banerjee, Kirsten Donovan, Christina Fincher Organizations: Croatian National Bank, REUTERS, Central Bank, Federal, Reuters, Jackson, ECB, CIBC, Bannockburn Global Forex, Thomson Locations: Zagreb, Croatia, London, Britain, U.S, Bannockburn, Singapore

☆ 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

☆ ECB survey points to stickier underlying inflation
▼ + stars: | 2023-07-28 | by ( ) www.reuters.com time to read: +1 min

FRANKFURT, July 28 (Reuters) - Core inflation in the euro zone will come down more slowly than previously thought as wage growth is seen picking up in a tight labour market, a European Central Bank survey showed on Friday. The latest Survey of Professional Forecasters (SPF) was presented to ECB policymakers this week as they decided to raise interest rates for a ninth consecutive time but also signal that the next step was still undecided and a pause was on the cards. "Respondents indicated that the upward revisions reflected recent data outturns showing more persistence than expected as well as higher forecast wage growth," the ECB said. Forecasts for the unemployment rate were revised down for this year and the next -- to 6.6% and 6.7% respectively -- despite slightly lower growth expectations for 2024 and 2025. Reporting By Francesco Canepa; editing by Balazs KoranyiOur Standards: The Thomson Reuters Trust Principles.

Persons: Francesco Canepa, Balazs Koranyi Organizations: European Central Bank, Professional, ECB, Thomson Locations: FRANKFURT

☆ Take Five: School's (not) out for summer
▼ + stars: | 2023-07-21 | by ( ) www.reuters.com time to read: +5 min

LONDON, July 21 (Reuters) - The peak holiday season is gearing up, but school's not quite out for summer in financial markets. Also in focus are earnings from some of the massive tech and growth stocks that have led markets higher this year. Reuters Graphics2/ SUMMER READINGBefore they go on their summer break, ECB policymakers have a well-flagged rate hike to deliver. Rate-setters' summer reading list just got longer. Second-quarter earnings are expected to decrease 9.2% from a year earlier, according to I/B/E/S data from Refinitiv, with aggregate earnings likely to be weighed down by poor performance from energy companies.

Persons: school's, Ira Iosebashvili, Kevin Buckland, Naomi Rovnick, Alun John, Dhara, Jerome Powell, Christine Lagarde, Kazuo Ueda's, Shinichi Uchida, Uchida, Ueda, Stocks, it's, Dhara Ranasinghe, Muralikumar Organizations: U.S . Federal Reserve, European Central Bank and Bank of Japan, Reserve, Microsoft, Reuters, ECB, Bank of Japan, Barclays, People's Party, Socialist Workers ' Party, Thomson Locations: Spanish, Ira, New York, Tokyo, London, Europe, SPAIN, Spain

☆ 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

☆ 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

☆ For markets, BoE communication is bottom of the class
▼ + stars: | 2023-07-17 | by ( Yoruk Bahceli | ) www.reuters.com time to read: +6 min

U.S. Federal Reserve and European Central Bank expectations have meanwhile risen only marginally. For investors, clear communication from central bankers is crucial as they transmit their policy to borrowing costs through markets. The BoE was the first major central bank to start hiking rates. In contrast, they have long bet on more hikes than the BoE's main forecasts have implied are needed to tame inflation, rates futures show. BoE messaging, suggesting a reluctance to hike, has made it "very difficult" to own gilts recently, he said.

Persons: BoE, Toby Melville, Shamik Dhar, Andrew Bailey, Bailey, Schroders, Azad Zangana, Zangana, Liz Truss, Myles Bradshaw, Chris Jeffery, Jerome, Powell, Christine, Lagarde, it's, Craig, Yoruk, Dhara Ranasinghe, William Schomberg, John Stonestreet Organizations: Bank of England, REUTERS, Fed, ECB, of England, Traders, . Federal Reserve, European Central Bank, BNY Mellon Investment Management, Bank of England's, Investors, Graphics, of England's, Reuters, Asset Management, Thomson Locations: London, Britain, U.S, Dhar

"There's no real consensus at the moment about the increase in interest rates among economic actors," Jeremie Delecourt, chief operating officer at French private equity fund Ardian, told Reuters. In the euro zone, the peak is near after a combined 4 percentage points rise in the past year, ECB policymaker and French central bank governor Francois Villeroy de Galhau said on a panel at the conference. But he also said that rates would be left high for as long as necessary to ensure that inflation is headed back to the European Central Bank's 2% target by 2025. The ECB raised interest rates to their highest level in 22 years last month and promised another hike this month, with possibly another in September. "I see quite a bit of optimism in the short term, but I see a lot of downside risks if there is a policy mistake, especially from the central banks," she added.

Persons: Jeremie Delecourt, Francois Villeroy de Galhau, Jean, Louis Girodolle, Lazard, Mario Draghi's, Somersan Coqui, Daniel Barneix, Barneix, Veronika Grimm, Leigh Thomas, Alexander Smith Organizations: Reuters, ECB policymaker, Central, ECB, Atlantic, Allianz Trade, Thomson Locations: PROVENCE, France, United States, Europe, Aix, Provence

☆ Morning Bid: China dampens the mood again
▼ + stars: | 2023-07-05 | by ( ) www.reuters.com time to read: +2 min

A look at the day ahead in European and global markets from Sonali DesaiChina's faltering economic recovery has once again dominated activity in financial markets, dampening risk sentiment and giving the dollar a broad boost in relatively muted moves after the U.S. July 4 holiday. The private-sector Caixin/S&P Global services purchasing managers index hit a five-month low in June, reflecting growing vulnerability in a once resilient sector of the massive economy. The data quickly reversed a day-old bounce in the Chinese yuan, which appeared on Tuesday to have finally paid heed to the central bank's series of stronger-than-expected midpoint settings and other measures to slow its decline. Beijing's export curbs on two widely used metals in semiconductors and electric vehicles continued to dominate headlines, drawing strident commentary in the domestic press just before Treasury Secretary Janet Yellen's visit to China. The European and UK calendar is dominated by final services and composite PMIs for June, also expected to confirm a slowing in what has been a consumption-led economic recovery.

Persons: Sonali Desai, Janet Yellen's, Tesla, BYD, Francois Villeroy de Galhau, Jacqueline Wong Organizations: U.S, P Global, ECB policymaker, Paris U.S, Thomson Locations: China, U.S, Paris

☆ Euro zone inflation falls again in June as energy prices tumble
▼ + stars: | 2023-06-30 | by ( ) www.reuters.com time to read: +3 min

FRANKFURT, June 30 (Reuters) - Inflation in the euro zone extended its decline in June as the cost of fuel tumbled, more than offsetting an acceleration in prices for services, a preliminary reading showed on Friday. The data, pointing to only the smallest drop in underlying inflation, was unlikely to sway the European Central Bank, which has pencilled in a ninth consecutive rate hike for July and is eyeing one in September too. "Inflation is still high and sticky but momentum is moderating," said Frederik Ducrozet, head of macroeconomic research at Pictet Wealth Management. The euro zone unemployment rate remained at an historic low of 6.5% in May, Eurostat reported separately on Friday. Big differences remain between euro zone countries, with June headline inflation falling to as little as 1.6% in Spain and Belgium and 1.0% in Luxembourg while staying in double digits in Slovakia (11.3%) and close to them in the Baltics.

Persons: chalking, Frederik Ducrozet, Ulrike Kastens, Christine Lagarde, Neil Shah, Francesco Canepa, Catherine Evans Organizations: European Central Bank, Pictet Wealth Management, ECB, DWS . Services, Eurostat, Edison Group, Thomson Locations: FRANKFURT, Germany, Europe, Italy, Portugal, Spain, Belgium, Luxembourg, Slovakia, Baltics

☆ FOREX Dollar weaker after data burst, euro rises on ECB comments
▼ + stars: | 2023-06-27 | by ( Chuck Mikolajczak | ) www.reuters.com time to read: +4 min

Additional data on single-family new home sales in May and home prices in April also indicated the housing market has been able to weather rising interest rates from the U.S. Federal Reserve. Morgan Stanley said on Tuesday it was now expecting the Fed to hike its key interest rate by 25 basis points in July, from an earlier estimate of a pause, raising its terminal rate forecast to 5.375%. The euro was up 0.49% to $1.0957 after climbing to $1.0976, the highest since June 22, after comments from ECB officials. Other ECB policymakers weren't anticipating clear evidenceinflation is easing enough that would enable the central bank to pause their interest rate hikes. The euro rose 0.84% against the yen at 157.830.

Persons: Christine Lagarde, Joseph Trevisani, Morgan Stanley, Shunichi Suzuki, Lagarde, Sterling, Jerome Powell, Andrew Bailey, Kazuo Ueda, Yevgeny Prigozhin, Vladimir Putin, Chuck Mikolajczak, David Evans, Alex Richardson Organizations: YORK, European Central Bank, greenback, U.S, Conference Board, U.S . Federal, Bank of Japan, Japan's Finance, ECB, Federal, Bank of England, Thomson Locations: U.S, Russian, Belarus

☆ ECB's Kazaks sees rate hikes past July even as economy softens
▼ + stars: | 2023-06-27 | by ( ) www.reuters.com time to read: +3 min

SINTRA, Portugal, June 27 (Reuters) - The European Central Bank will likely keep raising interest rates after its next meeting even as the economy slows because inflation remains too high, ECB policymaker Martins Kazaks said on Tuesday. But Kazaks, the Latvian central bank governor, said he expected the euro zone economy to simply slow or stagnate, rather than contract, and this should not stop the ECB in its fight against high inflation. "I think rates will need to be raised past July but when and by how much will be data dependent." But Kazaks pushed back against market bets on rate cuts by the ECB in the first half of next year. "And not at the end of the forecast period but towards the middle of the forecast period."

Persons: ECB policymaker Martins Kazaks, Kazaks, we’ll, Francesco Canepa, Shri Navaratnam Organizations: European Central Bank, ECB policymaker, ECB, Reuters, Thomson Locations: SINTRA, Portugal, Germany, Latvian, ECB's

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

☆ 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

Growth in the euro zone is at best stagnating and inflation has been moderating for months, courtesy of lower energy prices and the steepest increase in interest rates in the ECB's 25-year history. But inflation in the euro zone is still unacceptably high for the ECB at 6.1% and underlying price growth, which typically excludes food and energy, is only starting to slow. That was set to keep the ECB on the tightening path, particularly after it failed to predict the current bout of high inflation and began raising rates later than many global peers last year. Two quarters of contraction in industrial powerhouse Germany dragged the euro zone into a shallow recession last winter and the economy is likely to eke out only modest growth this year. "The Governing Council’s past rate increases are being transmitted forcefully to financing conditions and are gradually having an impact across the economy," the ECB said in the statement.

Persons: Christine Lagarde, Francesco Canepa, Catherine Evans Organizations: European Central Bank, ECB, U.S . Federal Reserve, Staff, Reuters, Germany, Thomson Locations: FRANKFURT, ECB's

That is likely to keep the ECB on the tightening path, particularly after it failed to predict the current bout of high inflation and began raising rates later than many global peers last year. Economists polled by Reuters expect another move of the same magnitude in July before the ECB pauses for the rest of 2023. Instead, euro zone rate-setters have focused on actual economic data that has been painting a mixed picture. Two quarters of contraction in industrial powerhouse Germany dragged the euro zone into a shallow recession last winter and the economy is likely to eke out only modest growth this year. As a result, economists expect the ECB to send out a more balanced message about the outlook than at recent meetings, when it stressed the need to raise rates further to cool demand.

Persons: Carsten Brzeski, Christine Lagarde, Berenberg, Francesco Canepa, Catherine Evans Organizations: ECB, European Central Bank, U.S . Federal Reserve, ING, Reuters, Deutsche Bank, Germany, Thomson Locations: FRANKFURT, ECB's

☆ 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 rates to peak by summer - Villeroy
▼ + stars: | 2023-05-22 | by ( ) www.reuters.com time to read: +1 min

PARIS, May 22 (Reuters) - European Central Bank interest rate hikes are likely to peak out by the end of summer, but the more important issue now is how long rates stay elevated than the exact level, French ECB policymaker Francois Villeroy de Galhau said on Monday. Villeroy said the lag between the ECB's exceptionally fast rate hikes over the last 10 months and their impact on the economy was more likely at the upper end of the two-year range economists expect. That made monitoring the pass-through of those hikes, which saw rates increased by 375 basis points, more important for monetary policy moves in the coming months than how much further rates are increased. "I expect today that we will be at the terminal rate not later than by summer," Villeroy told an event held at the Bank of France. "In the meantime, we have three possible Governing Councils either for hiking or pausing but don't deduce a guidance from this or a preference for a given terminal rate," he added.

☆ ECB needs to keep interest rates 'sustainably high' to combat inflation - Lagarde
▼ + stars: | 2023-05-19 | by ( Jesús Aguado | ) www.reuters.com time to read: +2 min

Summary ECB boss says bank needs to be 'courageous' to control pricesLagarde hints at more tightening despite critical momentMADRID, May 19 (Reuters) - The European Central Bank needs to keep interest rates high to curb inflation in the medium term, its president Christine Lagarde said on Friday, signalling more monetary tightening. The ECB slowed the pace of rate hikes this month with a 25-basis-point rise, but Lagarde indicated the cycle was not over. "We still have to have sustainably high interest rates, so it's a time when we have to really buckle up and look at this target that we have and deliver on it," Lagarde told Spanish state television TVE. The ECB has a medium term inflation target of 2%. Lagarde, who did not elaborate on potential further hikes, said: "Our goal is simple and straightforward: price stability.

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