The dollar index slipped 0.1%, reversing from its rally last week, while the euro rose 0.1% against the greenback to $1.0978. The British pound gained 0.2% against the dollar, standing at $1.2764. While the Japanese yen has slumped following weak Japanese wage data, the currency held steady against the dollar, which fell 0.25% to 145.39 yen.

According to future markets, investors are expecting a total of 140 basis points in rate cuts this year, pricing a two-thirds chance that they will begin in March. Still, some experts believe that markets may be getting ahead of themselves. “In our view, investors are still too optimistically positioned for Fed rate cuts,” Rabobank senior FX strategist Jane Foley commented in a note to investors.

The post Dollar Retreats as Investors Anticipate Rate Cuts appeared first on theprimarymarket.com.

Spain reported that its consumer prices rose 2.6% year-on-year in August, up from 2.3% in July. This fell directly in line with analysts’ predictions. German state North Rhine-Westphalia (NRW) saw a 5.9% year-on-year rise in inflation, up from 5.8% in July and signifying that the ECB may not bring an end to its interest rate hikes anytime soon.

Money markets are pricing a 60% chance of the ECB hiking rates by 25 basis points in September. “A September hike at this stage could be more of a coin toss, but more importantly, we sense that the hawks will see it as a last chance to hike one final time,” Benjamin Schroeder, a senior rates strategist at ING observed.

The post Euro Eases Against Dollar As Investors Await Clues On ECB Interest Rate Path appeared first on theprimarymarket.com.

Measured against the greenback, the euro fell to its lowest point since mid-June at around $1.0766, declining 0.13% on the day. Still, the dollar strengthened overall against major world currencies as a whole, with the dollar index rising to 104.31, the highest since June 6. Most recently, the index slipped 0.1%, suggesting that observers are exhibiting caution ahead of Powell’s address at the Jackson Hole Economic Policy Symposium.

Aside from inflation concerns, the euro was also hit by a slump in manufacturing activity across the European continent. This slide in business activity has raised bets for further rate hikes.

The post Euro Slips Amid ECB Rate Talks appeared first on theprimarymarket.com.

The pound rose 0.1% against the dollar to $1.2913 while falling 0.1% against the euro to 85.81 pence. This comes after the euro fell 0.7% against the British currency on Tuesday; its largest daily fall since February.

Gains by the euro were limited, however, by investors who refused to over-commit to the currency given that the European Central Bank (ECB) is set to deliver its monetary policy decision the following day. The ECB is widely expected to resume its interest rate hikes.

ING strategist Chris Turner warned that the limited rise of the euro appears to result from concerns ahead of the ECB’s decision and not necessarily a bullish outlook on the sterling’s prospects going forward.

“Given that we are mildly negative on the euro going into tomorrow’s ECB meeting and that UK rates might be dragged higher by U.S. rates later today, we would say euro/sterling could have a little more downside to the 85.20 area over the next couple of sessions,” Turner remarked.

The post Sterling Gains Ground Against Dollar, Loses to Euro Ahead of Rate Decisions appeared first on theprimarymarket.com.

BoE’s Decision Maker Panel showed that output price inflation fell to 5.3% in the three months ending in June. Output price inflation was 5.4% for the three months ending May. June’s reading is the lowest since March 2022.

Given this cooldown, markets now expect the BoE’s interest rate to peak at 6.5% in February. BoE officials are still undecided on further rate hikes, monitoring economic data closely for guidance.

Andrew Bailey, Governor of the BoE, stated that the central bank must continue to adjust its monetary policy accordingly in order to attain its 2% target for UK inflation.

“Markets remain highly sensitive to any incoming developments on the price side and the still quite aggressive BoE tightening expectations,” Francesco Pesole, FX strategist at ING observed.

The post Sterling Rises as UK Companies Lower Price Inflation Expectations appeared first on theprimarymarket.com.

The index, compiled by S&P Global, fell from 52.8 in May to 50.3 in June. This is slightly above the 50 mark that separates growth from contraction, thereby signaling a slowdown in economic growth across the region.

“After eurozone GDP fell for the second time in a row in the first quarter, the probability has increased somewhat that the GDP change will again carry a negative sign in the current quarter,” Cyrus de la Rubia, chief economist at Hamburg Commercial Bank explained.

The composite new business index fell from 50.3 to 48.3, signaling that overall consumer demand across the eurozone has dropped. The services industry index declined to 52.4 from 55.1. That fell below a Reuters poll expectation of 54.5.

Manufacturing activity was the worst-hit gauge of business growth being measured, falling from 44.8 to 43.6 to extend its decline since last July. This is the lowest level since May 2020, at the height of the COVID pandemic.

The post Eurozone Business Growth Comes to a Standstill in June appeared first on theprimarymarket.com.

Eurozone gross domestic product (GDP) fell by 0.1% compared to the previous quarter, while it rose by 1.0% compared to the same time the previous year. The revision is primarily a result of a second estimate released by Germany’s statistics office showing that the country went into recession in early 2023. The revision also cut the euro zone’s fourth-quarter GDP growth to -0.1%.

In addition to Germany, it was also found that the GDP declined on a quarter-on-quarter basis in Greece, Ireland, Lithuania, Malta, and the Netherlands.

According to Eurostat, quarterly GDP was most heavily impacted by increased household spending, which shredded 0.1 percentage points, public expenditure, which caused a 0.3 percentage point hit, and inventory changes, dragging down GDP by 0.4 percentage points.

The post Euro Zone in Recession Following Downward Revision of Growth appeared first on theprimarymarket.com.

Germany’s 10-year bund yield, the eurozone benchmark, was flat at 2.37%, while the two-year yield was up two basis points at 2.91%. Italty’s 10-year yield edged higher by one basis point to 4.18%, while the two-year yield was up two basis points to 3.52%.

During what has been a quiet period leading up to the next policy meeting, ECB executive board member Isabel Schnabel told a Belgian newspaper, “Given the high uncertainty about the persistence of inflation, the costs of doing too little continue to be greater than the costs of doing too much.” Dutch central bank chief Klaas Knot appeared to back further rate hikes, claiming that although inflation has remained resilient, stricter monetary tightening has had an effect.

Four ECB policymakers are scheduled to make statements on Wednesday, thereby providing observers with more perspective on potential actions that the ECB could take with its interest rate policy going forward. Since the start of the inflation crisis last year, the ECB has raised interest rates by a combined 375 basis points.

The post Euro Zone Yields Hold Steady Following ECB Policymakers’ Comments appeared first on theprimarymarket.com.

Eurozone inflation decreased from 7.0% to 6.1% in May, beating estimates of 6.3% from a Reuters poll of analysts. Still, European policymakers believe that there is more work to be done as inflation remains significantly higher than the ECB’s target rate of 2%.

“Today, inflation is too high and it is set to remain so for too long,” Lagarde declared in a speech on Thursday morning. “We have made clear that we still have ground to cover to bring interest rates to sufficiently restrictive levels.”

In response to Lagarde’s statement, markets have now priced an 85% chance of a 25 basis point hike when the ECB convenes for its policy meeting on June 15.

On the morning of the announcement, the euro remained flat at $1.0692, above the two-month low of $1.0635 that it hit on Wednesday.

The post Euro Steadies as ECB President Promises Further Rate Hikes appeared first on theprimarymarket.com.

Compiled by S&P Global, the report revealed that PMI covering the services industry hit 56.6 in April, in stark contrast to expectations in a Reuters poll for a decline to 54.5. While living expenses continued to rise in the eurozone, demand for services rose as consumers continued to spend.

Manufacturers, on the other hand, saw a faster decline in demand, with headline manufacturing PMI falling from 47.3 to 45.5. This is the lowest since the outbreak of the coronavirus pandemic in 2020.

“The HCOB Purchasing Managers’ Indices for the euro zone show a very friendly overall picture of an economy that continues to recover,” Cyrus de la Rubia, chief economist at Hamburg Commercial Bank observed before going on to warn that this growth is unevenly distributed.

The post Euro Zone Economic Recovery Gaining Pace, PMI Finds appeared first on theprimarymarket.com.

The dollar index slipped 0.1%, reversing from its rally last week, while the euro rose 0.1% against the greenback to $1.0978. The British pound gained 0.2% against the dollar, standing at $1.2764. While the Japanese yen has slumped following weak Japanese wage data, the currency held steady against the dollar, which fell 0.25% to 145.39 yen.

According to future markets, investors are expecting a total of 140 basis points in rate cuts this year, pricing a two-thirds chance that they will begin in March. Still, some experts believe that markets may be getting ahead of themselves. “In our view, investors are still too optimistically positioned for Fed rate cuts,” Rabobank senior FX strategist Jane Foley commented in a note to investors.

The post Dollar Retreats as Investors Anticipate Rate Cuts appeared first on theprimarymarket.com.

Spain reported that its consumer prices rose 2.6% year-on-year in August, up from 2.3% in July. This fell directly in line with analysts’ predictions. German state North Rhine-Westphalia (NRW) saw a 5.9% year-on-year rise in inflation, up from 5.8% in July and signifying that the ECB may not bring an end to its interest rate hikes anytime soon.

Money markets are pricing a 60% chance of the ECB hiking rates by 25 basis points in September. “A September hike at this stage could be more of a coin toss, but more importantly, we sense that the hawks will see it as a last chance to hike one final time,” Benjamin Schroeder, a senior rates strategist at ING observed.

The post Euro Eases Against Dollar As Investors Await Clues On ECB Interest Rate Path appeared first on theprimarymarket.com.

Measured against the greenback, the euro fell to its lowest point since mid-June at around $1.0766, declining 0.13% on the day. Still, the dollar strengthened overall against major world currencies as a whole, with the dollar index rising to 104.31, the highest since June 6. Most recently, the index slipped 0.1%, suggesting that observers are exhibiting caution ahead of Powell’s address at the Jackson Hole Economic Policy Symposium.

Aside from inflation concerns, the euro was also hit by a slump in manufacturing activity across the European continent. This slide in business activity has raised bets for further rate hikes.

The post Euro Slips Amid ECB Rate Talks appeared first on theprimarymarket.com.

The pound rose 0.1% against the dollar to $1.2913 while falling 0.1% against the euro to 85.81 pence. This comes after the euro fell 0.7% against the British currency on Tuesday; its largest daily fall since February.

Gains by the euro were limited, however, by investors who refused to over-commit to the currency given that the European Central Bank (ECB) is set to deliver its monetary policy decision the following day. The ECB is widely expected to resume its interest rate hikes.

ING strategist Chris Turner warned that the limited rise of the euro appears to result from concerns ahead of the ECB’s decision and not necessarily a bullish outlook on the sterling’s prospects going forward.

“Given that we are mildly negative on the euro going into tomorrow’s ECB meeting and that UK rates might be dragged higher by U.S. rates later today, we would say euro/sterling could have a little more downside to the 85.20 area over the next couple of sessions,” Turner remarked.

The post Sterling Gains Ground Against Dollar, Loses to Euro Ahead of Rate Decisions appeared first on theprimarymarket.com.

BoE’s Decision Maker Panel showed that output price inflation fell to 5.3% in the three months ending in June. Output price inflation was 5.4% for the three months ending May. June’s reading is the lowest since March 2022.

Given this cooldown, markets now expect the BoE’s interest rate to peak at 6.5% in February. BoE officials are still undecided on further rate hikes, monitoring economic data closely for guidance.

Andrew Bailey, Governor of the BoE, stated that the central bank must continue to adjust its monetary policy accordingly in order to attain its 2% target for UK inflation.

“Markets remain highly sensitive to any incoming developments on the price side and the still quite aggressive BoE tightening expectations,” Francesco Pesole, FX strategist at ING observed.

The post Sterling Rises as UK Companies Lower Price Inflation Expectations appeared first on theprimarymarket.com.

The index, compiled by S&P Global, fell from 52.8 in May to 50.3 in June. This is slightly above the 50 mark that separates growth from contraction, thereby signaling a slowdown in economic growth across the region.

“After eurozone GDP fell for the second time in a row in the first quarter, the probability has increased somewhat that the GDP change will again carry a negative sign in the current quarter,” Cyrus de la Rubia, chief economist at Hamburg Commercial Bank explained.

The composite new business index fell from 50.3 to 48.3, signaling that overall consumer demand across the eurozone has dropped. The services industry index declined to 52.4 from 55.1. That fell below a Reuters poll expectation of 54.5.

Manufacturing activity was the worst-hit gauge of business growth being measured, falling from 44.8 to 43.6 to extend its decline since last July. This is the lowest level since May 2020, at the height of the COVID pandemic.

The post Eurozone Business Growth Comes to a Standstill in June appeared first on theprimarymarket.com.

Eurozone gross domestic product (GDP) fell by 0.1% compared to the previous quarter, while it rose by 1.0% compared to the same time the previous year. The revision is primarily a result of a second estimate released by Germany’s statistics office showing that the country went into recession in early 2023. The revision also cut the euro zone’s fourth-quarter GDP growth to -0.1%.

In addition to Germany, it was also found that the GDP declined on a quarter-on-quarter basis in Greece, Ireland, Lithuania, Malta, and the Netherlands.

According to Eurostat, quarterly GDP was most heavily impacted by increased household spending, which shredded 0.1 percentage points, public expenditure, which caused a 0.3 percentage point hit, and inventory changes, dragging down GDP by 0.4 percentage points.

The post Euro Zone in Recession Following Downward Revision of Growth appeared first on theprimarymarket.com.

Germany’s 10-year bund yield, the eurozone benchmark, was flat at 2.37%, while the two-year yield was up two basis points at 2.91%. Italty’s 10-year yield edged higher by one basis point to 4.18%, while the two-year yield was up two basis points to 3.52%.

During what has been a quiet period leading up to the next policy meeting, ECB executive board member Isabel Schnabel told a Belgian newspaper, “Given the high uncertainty about the persistence of inflation, the costs of doing too little continue to be greater than the costs of doing too much.” Dutch central bank chief Klaas Knot appeared to back further rate hikes, claiming that although inflation has remained resilient, stricter monetary tightening has had an effect.

Four ECB policymakers are scheduled to make statements on Wednesday, thereby providing observers with more perspective on potential actions that the ECB could take with its interest rate policy going forward. Since the start of the inflation crisis last year, the ECB has raised interest rates by a combined 375 basis points.

The post Euro Zone Yields Hold Steady Following ECB Policymakers’ Comments appeared first on theprimarymarket.com.

Eurozone inflation decreased from 7.0% to 6.1% in May, beating estimates of 6.3% from a Reuters poll of analysts. Still, European policymakers believe that there is more work to be done as inflation remains significantly higher than the ECB’s target rate of 2%.

“Today, inflation is too high and it is set to remain so for too long,” Lagarde declared in a speech on Thursday morning. “We have made clear that we still have ground to cover to bring interest rates to sufficiently restrictive levels.”

In response to Lagarde’s statement, markets have now priced an 85% chance of a 25 basis point hike when the ECB convenes for its policy meeting on June 15.

On the morning of the announcement, the euro remained flat at $1.0692, above the two-month low of $1.0635 that it hit on Wednesday.

The post Euro Steadies as ECB President Promises Further Rate Hikes appeared first on theprimarymarket.com.

Compiled by S&P Global, the report revealed that PMI covering the services industry hit 56.6 in April, in stark contrast to expectations in a Reuters poll for a decline to 54.5. While living expenses continued to rise in the eurozone, demand for services rose as consumers continued to spend.

Manufacturers, on the other hand, saw a faster decline in demand, with headline manufacturing PMI falling from 47.3 to 45.5. This is the lowest since the outbreak of the coronavirus pandemic in 2020.

“The HCOB Purchasing Managers’ Indices for the euro zone show a very friendly overall picture of an economy that continues to recover,” Cyrus de la Rubia, chief economist at Hamburg Commercial Bank observed before going on to warn that this growth is unevenly distributed.

The post Euro Zone Economic Recovery Gaining Pace, PMI Finds appeared first on theprimarymarket.com.