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REUTERS/Kai Pfaffenbach/File PhotoData on Thursday showed euro zone inflation held at 5.3% in August rather than dropping. Overall money supply in the bloc contracted in July for the first time since 2010, demonstrating the extent to which ECB policy has tightened financial conditions. And even if investors are divided on September’s decision, the consensus is that the ECB will be done raising rates soon. Longer-term, markets expect the ECB to start cutting rates by the second quarter of 2024. (This story has been corrected to clarify that Aviva favours a small overweight in European bonds, not longer-dated euro zone bonds, in paragraph 19)
Persons: Christine Lagarde, Kai Pfaffenbach, Piet Christiansen, ’ indecisiveness, ” Christiansen, Isabel Schnabel, Robert Holzmann, , Mauro Valle, Valle, Edward Hutchings, Frederik Ducrozet, ” Aviva’s Hutchings, ” Pictet’s Ducrozet Organizations: Reuters, European Central Bank, Central Bank, ECB, REUTERS, Danske Bank, Generali Investments, Treasury, Aviva Investors, Pictet Wealth Management, Aviva Locations: Frankfurt, Germany, Austrian
U.S. Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. But, while euro area-wide inflation unexpectedly held at 5.3% this month, underlying price growth fell, complicating matters for the ECB, who now appear more likely to keep interest rates unchanged next month than raise them. ECB rate-setter Schnabel - considered one of the most hawkish members on the ECB - said euro zone growth was weaker than predicted but that does not necessarily void the need for more rate hikes. "I think the fact she is flagging downside risks to growth is putting some downside pressure on the euro." Both sterling and the euro are set for monthly drops of over 1% against the dollar in August.
Persons: Dado Ruvic, policymaker Isabel Schnabel, Schnabel, We've, Michael Brown, Chris Turner, Samuel Indyk, Tom Westbrook, Shri Navaratnam, Kim Coghill, Chizu Organizations: REUTERS, European Central Bank, ECB, Trader, Traders, Federal, Commerce Department, UK, CEE, New Zealand, Aussie, Thomson Locations: Tokyo
Inflation Rate in Eurozone Holds Steady
  + stars: | 2023-08-31 | by ( Eshe Nelson | More About Eshe Nelson | ) www.nytimes.com   time to read: +3 min
By Country: Higher energy prices add to inflation pressures in the region’s largest economies. In some of the eurozone’s largest economies, rebounding energy prices offset slowing food inflation. The annual rate of inflation accelerated to 5.7 percent in France and to 2.4 percent in Spain this month. In Spain, inflation had fallen below 2 percent, the European Central Bank’s target, in June, but has since climbed back above it. The acceleration of inflation in some of the region’s largest economies arrives two weeks before the European Central Bank’s next policy meeting.
Persons: Christine Lagarde, , Isabel Schnabel Organizations: European Union, European Central Bank, Central Bank’s Locations: France, Spain, Germany, Europe’s
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
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
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
That will leave investors guessing whether another rate hike is coming in September or if July marks the end of the ECB's fastest-ever tightening spree. While markets had fully priced in another rate hike just a few weeks ago, investors are now split, with many expecting July's move to be the last. "We see a 60% probability that the ECB will hike again by a final 25bp on 14 September," Berenberg's Salomon Fiedler said. "Softer data such as the drop in the Eurozone composite PMI indicate a rising chance that the central bank will stay put in September already." 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: July's, Berenberg's Salomon Fiedler, Isabel Schnabel, Jerome Powell, Anatoli Annenkov, Christine Lagarde, Commerzbank's Marco Wagner, Catherine Evans Organizations: European Central Bank, ECB, PMI, U.S . Federal Reserve, Thomson Locations: FRANKFURT
CNN —A Princess Cruises ship crashed into a pier in San Francisco as it was preparing to dock after a 10-day Alaskan cruise, officials said. The 113,561-ton Ruby Princess “made unexpected contact with the dock at Pier 27” at the port of San Francisco Thursday morning, Princess Cruises said in a statement obtained by CNN. Princess Cruises said it was still planning to board passengers onto the Ruby Princess, but it was not clear when the ship would leave for Alaska. KGO“I noticed we were spinning pretty quick, to be that close to the dock,” Zasso told CNN affiliate KGO. The 951-foot-long Ruby Princess was refurbished in 2018, according to Princess Cruises.
Persons: , Cruises, disembarkation, Paul Zasso, Princess Cruises, ” Zasso, Hunter Schnabel, Ruby, Jim Simpson, ” Simpson, he’s, Organizations: CNN, Princess Cruises, Princess, KGO, US Coast Guard Locations: San Francisco, Alaska
Brigid Berlin, a fixture of the downtown art world in the ’60s and ’70s, will be forever associated with Andy Warhol — the Factory superstar played Duchess, a version of herself as a lesbian drug dealer, in Warhol and Paul Morrissey’s 1966 film “Chelsea Girls” — but three years after her death in 2020, a new exhibition considers Berlin’s art in its own right. “Brigid really was an innovator when you think of the way she used persona as a medium,” says Alison M. Gingeras, who has curated “Brigid Berlin: The Heaviest,” at New York’s Vito Schnabel Gallery, which examines the artist’s life, from her tony uptown upbringing to her secluded later life, with the wild times in between. “For too long she has been pushed into the footnotes.” In a room that features the same wallpaper as Berlin’s Murray Hill apartment, visitors can peruse photos and letters from her childhood. “Brigid Berlin: The Heaviest,” is on view through Aug. 18, vitoschnabel.com. Stay HereA Hygge Homestay in Seoul
Persons: Brigid Berlin, Andy Warhol, Warhol, Paul Morrissey’s, “ Brigid, , Alison M, Gingeras, New York’s Vito Schnabel, tony, Murray, Honey Berlin, Robert Rauschenberg, Willem de Kooning, Larry Rivers, “ Brigid Berlin Organizations: Factory, Chelsea Girls ”, Max’s, Locations: New, Max’s Kansas City, Seoul
New York CNN —A fire near Tiffany & Co.’s newly renovated flagship store in New York City sent smoke pouring out of the building on Thursday. Firefighters responded to a transformer fire that began in an electrical vault next to the jewelry store’s 5th Avenue location in Manhattan. Videos on social media showed dark plumes of smoke coming out of the historic building and spilling into the street. The fire comes just over two months after Tiffany officially reopened the doors of its 10-floor limestone flagship shop. The 5th Avenue flagship accounted for 10% of the brand’s global sales before it closed for renovations.
Persons: Firefighters, Tiffany, Bernard Arnault’s LVMH, Arnault, ” Tiffany’s, Jean, Michel Basquiat, Julian Schnabel, , Zenebou Sylla Organizations: New, New York CNN, Tiffany, The New York Fire Department, FDNY, Wall Street Locations: New York, New York City, Manhattan, The
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
Morning Bid: Ready for more rate hikes, and one cut
  + stars: | 2023-06-19 | by ( Wayne Cole | ) www.reuters.com   time to read: +3 min
June 19 (Reuters) - A look at the day ahead in European and global markets from Wayne Cole. It's been predictably subdued in Asia as a U.S. holiday provides a convenient excuse for stocks to consolidate recent hefty gains before a bevy of central bank meetings this week. Most indices are down, with the Nikkei off modestly having climbed 22% over a 10-week streak to hit 33-year highs. The coming week is also jammed with central bank action, led by China on Tuesday where prime loan rates are expected to be cut by 10 basis points. Futures seem unimpressed with just 21 basis points of tightening priced in by September, though one final hike in July is rated as a decent 70% chance.
Persons: Wayne Cole, It's, Antony Blinken's, deigned, Kazuo Ueda, Jerome Powell, Isabel Schnabel, Luis de Guindos, Philip Lane, Sam Holmes Organizations: Nikkei, NASDAQ, Bank of Japan, Federal, Bank of, ECB, Thomson Locations: Wayne, Asia, U.S, Beijing, China, Bank of England, Norway, Switzerland
LONDON, May 19 (Reuters) - The European Central Bank must continue its fight to tame inflation "with determination" because wages are rising, fiscal policy is too generous and inflation expectations remain too high, ECB board member Isabel Schnabel said on Friday. Their comments came against a backdrop of concerns about fallout on the financial system from an abrupt series of ECB rate hikes and speculation about a pause in tightening by the U.S. Federal Reserve. "This is why it's so important that we show strong determination to bring inflation back to 2%," she told an event in London. But Schnabel said the ECB should go on "raising rates to a sufficiently restrictive level and keeping them at that level for as long as necessary". At the same time it had "the tools to provide liquidity to the euro area financial system, if needed to preserve financial stability", she added.
Morning Bid: Rehash on rates ahead as ECB, BOE and Fed speak
  + stars: | 2023-05-19 | by ( ) www.reuters.com   time to read: +2 min
[1/2] Flowers are seen outside the Bank of England in the City of London financial district in London, Britain May 11, 2023. REUTERS/Henry NichollsA look at the day ahead in European and global markets from Vidya RanganathanSeveral key central bankers, including Fed Chair Jerome Powell, appear at a variety of events today, ensuring investors have plenty of commentary, and nearly similar synopses. The messaging from the BOE after last week's 12th rate rise has been consistent: It isn't done, the labour market is tight, quantitative tightening might even pick up pace. Wall Street, Treasury yields, implied U.S. interest rates and the dollar all rose on Thursday. G7 leaders kicked off a three-day summit in Hiroshima on Friday, and the focus there is on fresh sanctions against Russia and what they say about China.
Equity markets initially rose as the CPI data suggested the Fed's most aggressive rate hikes in four decades were yielding results. MSCI's gauge of stocks across the world (.MIWD00000PUS) edged down 0.06%, while stocks on Wall Street wavered after an early rally. CHINA CRACKDOWNForeign exchange markets had been treading water while markets weighed policymakers' rhetoric against traders' conviction that U.S. interest rates should fall. Emerging markets currencies rallied on Wednesday following the U.S. data, with MSCI's index (.MIEM00000CUS) up 0.15%. U.S. crude recently fell 2.06% to $72.19 per barrel and Brent was at $76.00, down 1.86% on the day.
Stocks tiptoe higher as US inflation data offers hope
  + stars: | 2023-05-10 | by ( Lawrence White | ) www.reuters.com   time to read: +4 min
MSCI's gauge of global equity performance (.MIWD00000PUS) rose 0.03% after the Labor Department's Consumer Price Index (CPI) rose 4.9% year-over-year in April, against expectations of 5%. "Bigger picture, I think the market is hyper fixated on the ‘pause’ but a pause is still restrictive overall," he said. The dollar index hit a session low of 101.36 after the headline April inflation data, while benchmark 10-year German bond yields edged down 4 basis points. Emerging markets currencies rallied on Wednesday following the U.S. data, with MSCI's index (.MIEM00000CUS) up 0.26%. Spot gold turned positive after the CPI data, last trading up 0.3%.
Stocks stumble in jittery mood ahead of US inflation
  + stars: | 2023-05-10 | by ( Tom Westbrook | ) www.reuters.com   time to read: +4 min
S&P 500 futures were steady and European futures rose 0.1%. "That's the thing that'd get taken out if CPI numbers come in on the higher side," said ING economist Rob Carnell. "It doesn't look particularly sensible if inflation is falling at too slow a rate and that could feed through into higher longer-term treasury yields as well." Interest rate futures imply about a 60% chance the Federal Reserve cuts rates in September, according to the CME FedWatch tool. "But the debt ceiling drama, and market participants’ focus on rate cuts is unlikely to change much from one CPI report.
SINGAPORE, May 10 (Reuters) - Stocks were struggling to advance in Asia and the dollar was firm on Wednesday ahead of U.S. consumer price data that could damage hopes for interest rate cuts later this year if inflation fails to show much of a decline. Overnight the S&P 500 (.SPX) fell 0.5% and S&P 500 futures were steady in the Asian morning. A firm U.S. dollar pushed the euro back below $1.10 to $1.0971. Treasuries were broadly steady overnight, though debt-ceiling brinkmanship is warping the bills market as investors avoid bills maturing early in June. The dollar was also firm at 135.14 yen and has lifted slightly from recent lows on the Aussie , kiwi and sterling .
Morning Bid: US uncertainty feeds caution in Asia
  + stars: | 2023-05-09 | by ( ) www.reuters.com   time to read: +2 min
A look at the day ahead in European and global markets from Asia markets correspondent Kevin Buckland. European investors hoping to find some clues on market direction from Asia may be disappointed today. Overall, the market mood was cautious ahead of the week's trading highlight, Wednesday's U.S. CPI report, which will put to the test the market's view that the Fed is done hiking. Reuters GraphicsAnd there are several other reasons that investor attention is squarely on the U.S., with the debt ceiling tussle deadlocked and banking sector troubles simmering. The Fed's quarterly Senior Loan Officer Opinion Survey ('SLOOS') also buoyed the mood, showing tighter lending conditions but no impending credit crunch.
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.
Morning Bid: Showdown on the ceiling
  + stars: | 2023-05-09 | by ( ) www.reuters.com   time to read: +5 min
With world markets still at an impasse on the extent of the economic slowdown and chance of recession, the U.S. debt ceiling impasse remains unresolved - and Tuesday's showdown at the White House is one of the few opportunities left to resolve it. Biden meets Republican House of Representatives Speaker Kevin McCarthy for the first time since February. There are only six days this month when the House and the Senate are in session when Biden is in Washington. Longer-term Treasury yields remain under wraps, however, with 2-year yields hovering just under 4%. DEBT CEILINGBeyond the debt ceiling row, the picture of the wider economy remains equivocal.
In the first quarter of 2023, net demand for loans to businesses fell the most since the end of 2008, the central bank found after polling 158 banks in the region between March 22 and April 6. “From a historical perspective, the pace of net tightening in credit standards remained at the highest level since the euro area sovereign debt crisis in 2011,” the ECB said. The central bank has made clear that it won’t ease the most intense campaign of rate hikes in its history until it is certain inflation is under control. “What really matters,” she added, is that inflation recedes to the central bank’s 2% target over the medium term. “Eurozone banks are already generally tightening credit standards and terms and loan demand is decreasing,” Berenberg economist Holger Schmieding said in a note to clients.
Euro zone inflation picks up but core unexpectedly slows
  + stars: | 2023-05-02 | by ( ) www.reuters.com   time to read: +3 min
FRANKFURT, May 2 (Reuters) - Euro zone inflation accelerated last month but underlying price growth eased unexpectedly, adding to arguments for a smaller interest rate hike at the European Central Bank's regular policy meeting on Thursday. Overall price growth in the 20 nations sharing the euro currency picked up to 7.0% in April from 6.9% a month earlier, Eurostat said on Tuesday, in line with expectations in a Reuters poll of economists. Excluding volatile food and fuel prices, core inflation slowed to 7.3% from 7.5%, while an even narrower measure, which excludes alcohol and tobacco, slowed to 5.6% from 5.7%, coming below forecasts for 5.7% for its first decline since last June. In a hopeful development for the ECB, processed food, alcohol and tobacco inflation slowed a full percentage point to 14.7%, suggesting that a long-awaited turnaround in food prices may now be happening. Services inflation accelerated to 5.2% from 5.1% but the price growth of non-energy industrial goods, another crucial segments, slowed to 6.2% from 6.6%.
LONDON, May 1 (Reuters) - Inflation in the euro area is too high for comfort, meaning markets expect the European Central Bank to deliver its seventh straight interest rate hike on Thursday. 1/ How much will the ECB hike rates by on Thursday? Most analysts expect at least one more rate move after Thursday, even as the Federal Reserve looks set to pause its rate hike campaign. Market pricing suggests ECB rates will peak around 3.6% this year, and Belgium's central bank governor Pierre Wunsch says he wouldn't be surprised to see rates rise to 4%. Tuesday's bank lending should offer some clues but it might be too early to gauge the full impact of the March banking crisis on financing conditions.
U.S. dollar gains as risk appetite wanes
  + stars: | 2023-04-25 | by ( ) www.cnbc.com   time to read: +2 min
The U.S. dollar index climbed 0.48% to 101.84, having dropped more than 4% since March 8. A weak consumer confidence report and a decline in Federal Reserve manufacturing data further added to the dollar's safe-haven appeal. Data showed U.S. consumer confidence fell to a nine-month low in April, a survey showed on Tuesday. The Conference Board said its consumer confidence index fell to 101.3 — the lowest since July 2022 - from a revised 104.0 in March. The yen fell 0.39% to 133.70 per dollar.
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