The inflation rate in countries overseen by the ECB jumped to 2.2% in November compared to 2.0% in the month prior and 1.7% in September. Across the entire European Union, the inflation rate went up from 2.3% in October to 2.5% in November.

According to ECB President Christine Lagarde, the central bank forecasts more fluctuations in the near future but fully expects to reach a stable 2% inflation rate over the medium term this year.

“We have made significant progress in 2024 in bringing down inflation and hopefully 2025 is the year when we are on target as expected and as planned in our strategy,” Lagarde said. “Of course we will continue our efforts to ensure that inflation stabilizes sustainably at that 2% medium-term target.”

Since June, the ECB officials have made four interest rate cuts, each 25 basis points. The ECB benchmark interest rate is currently set at 3.15%. Further rate cuts are expected this year, with experts predicting at least four more before June.

The post ECB Expects to Reach Its 2% Inflation Target in 2025 appeared first on theprimarymarket.com.

Holzmann, who serves as the head of Austria’s central bank, Oesterreichische Nationalbank, told media outlet Kleine Zeitung that there is “nothing at the moment that would argue” against another rate cut.

“As things look at the moment, it is possible (that there will be a cut in December). There is nothing at the moment that would argue against that, but that does not mean it will automatically happen,” Holzmann said.

However, Holzmann indicated that ECB, which serves as the central bank for European Union members who use EURO as their currency, will make the final decision on the data it receives next month.

“We do not have the latest forecasts and data. We will receive those in December. We will decide on that basis, yes or no,” he added.

ECB already lowered its interest rates three times since June, each time by 25 basis points, and brought it to 3.25%. It is widely expected that policymakers will cut the rate by a quarter of a percentage point in December if the move ends up happening.

The post ECB’s Robert Holzmann Hints at December Rate Cut appeared first on theprimarymarket.com.

Euro Zone inflation in October came at 2% compared to 1.7% in the month prior and above the 1.9% estimated by economists. The surge was mainly caused by a jump in energy and food prices.

Excluding the volatile energy and food prices, inflation has maintained a steady pace of 2.7%, although economists expected a slight dip to 2.6%.

ECB President Christine Lagarde admitted that inflation is still not under control, and further climb is expected in the coming months. However, she also predicts that the target of 2% will be achieved on a stable basis in 2025.

“The objective is in sight, but I am not going to tell you that inflation is under control,” Lagarde said in an interview with French media outlet Le Monde. “We also know that inflation will rise in the coming months, simply because of base effects.”

The recent data had some economists and officials arguing for a moderate approach to further rate cuts. ECB has cut its interest rates three times since July, with another cut expected in December. Traders are currently betting that ECB’s rates will drop to 2% by the end of the next year from the current 3.25%.

The post Euro Zone Inflation Climbs Higher Than Expected, Could Lead to Moderate Rate Cuts Approach appeared first on theprimarymarket.com.

This represents the third interest rate cut in 2024, which brought the ECB’s key deposit rate to 3.25%. The central bank cut rates by 25 basis points in June, followed by another 25 basis points cut in September. The most recent cut marks the first time that the ECB lowered its borrowing rate in back-to-back meetings since 2011.

According to ECB officials, the decision to cut the rates by a further 25 basis points was prompted by “an updated assessment of the inflation outlook, the dynamics of underlying inflation, and the strength of monetary policy transmission. “

ECB’s Governing Council predicts that inflation is expected to rise in the following months before “declining to target in the course of next year.”

The major drivers behind the ECB’s decision are slow economic activity and weaker spending.

“The incoming information suggests that economic activity has been somewhat weaker than expected,” ECB president Christine Lagarde said during a press conference.

Lagarde added that she and her colleagues are not committing to any particular path when it comes to future policy decisions, while experts predict that the ECB is aiming towards a key deposit rate of 2% at some point.

The post European Central Bank Lowers Interest Rates By 25 Basis Points appeared first on theprimarymarket.com.

UniCredit recently acquired a 9% stake in Commerzbank and has asked for approval to raise its stake to 29.9% with the ultimate goal of takeover. Germany’s government, on the other hand, is openly opposed to the move and is trying to stop it.

In a recent report, Bloomberg detailed talks with several central bank officials, who said that the merger of UniCredit and Commerzbank would likely be viewed as a positive move by the European Central Bank (ECB), which would have the last say on the approval of the deal. UniCredit is considered a “well-run bank,” while the ECB would welcome the financial consolidation of the European Union and an increase in the profitability of its banks.

On the other hand, Germany’s government is currently campaigning to prevent UniCredit from acquiring a more significant stake in Commerzbank. There are hesitations about relinquishing the control of one of the country’s largest banks to a foreign company and concerns that Italy’s outstanding debt could reflect negatively on Germany in case of a financial crisis.

Germany’s supervisor, BaFin, is currently in the midst of determining whether to allow UniCredit to build its stake in Commerzbank, with the decision expected to be announced soon. 

The post UniCredit’s Takeover of Germany’s Commerzbank Likely to Get a Green Light From Regulators appeared first on theprimarymarket.com.

Bloomberg Economics weighed in on the ECB’s latest policy decision, claiming: “The ECB will lower borrowing costs by 25 basis points in October and again in December. After that we see quarterly moves as policymakers feel their way to neutral.”

A Bloomberg survey of a range of economists found that there is a broad expectation that the ECB will accelerate its policy easing as a means of bringing borrowing costs down to a level that no longer stifles the economy by the end of 2025. In China, the economy appears to be continually underperforming its target, however, in the UK, inflation appears to be slowing towards the 2% mark.

The post ECB Considering Interest Rate Cut to Drive Global Monetary Easing appeared first on theprimarymarket.com.

The reduction follows the ECB’s quarter-point cut in June and brings its interest rate to 3.5%. It was a widely expected move, considering that the Eurozone’s inflation is getting closer to the targeted inflation mark and the risk of recession is becoming more apparent.

The inflation in the Eurozone fell to 2.2% in August compared to 2.6% in the month prior. It also marked a three-year low.

According to ECB president Christine Lagarde, the rate cut was unanimously approved compared to the June reduction that saw Governor of Austria’s central bank Robert Holzmann hold out.

The traders are now seeing a significant probability of further interest rate cuts coming during the October meeting while fully expecting a reduction in December. However, the ECB reiterated that it will take all factors into consideration before deciding on the next move. 

“Our interest rate decisions will be based on our assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation, and the strength of monetary policy transmission. We are not pre-committing to a particular rate path,” ECB said in a statement.

The post European Central Bank Slashes Its Interest Rate Again appeared first on theprimarymarket.com.

After hiking interest rates to an all-time high, the ECB opted to reduce the main refinancing rate from 4.50% to 4.25%, the interest rate for the marginal lending facility from 4.75% to 4.50%, and the interest rate for the deposit facility from 4.00% to 3.75% last month. While this was seen as the beginning of a trend of steady rate cuts, the ECB opted to take a balanced approach amid persisting inflation and wage growth.

The annual euro area inflation rate was 2.5% in June, coming down from 2.6% in May and 5.5% from the same period last year. This is still above the ECB’s 2% medium-term target, which the central banks remain focused on achieving in a “timely manner.”

While the ECB said in a press release that it “does not commit itself in advance to a specific interest rate path,” the economists expect another cut in September, followed by further cuts by the end of the year and in 2025.

“According to our central scenario, the next ECB rate cut will be delivered in September and will be followed by a long and gradual sequence of 25 basis points rate cuts per quarter in December, March, June, etc., i.e. the months when new macro projections will be presented,” UBS economist Reinhard Cluse told Reuters.

The post European Central Bank Keeps Rates Intact, September Cut Likely appeared first on theprimarymarket.com.

Despite the ECB’s concerns, investors are largely expecting rate cuts to arrive in the near term due to a belief that the central bank is acting too pessimistic in its inflation outlook. Financial markets are betting that a total of 127 basis points of rate cuts will be introduced throughout the course of the year, with the first being between April and June.

“Our view remains that the weak growth outlook – with activity below potential for many quarters ahead – and falling inflation will mean cuts can happen sooner rather than later,” Peter Goves, at MFS Investment Management commented.

The post European Central Bank Pushes Back Interest Rate Cuts appeared first on theprimarymarket.com.

According to a Bloomberg poll of economists, the European Central Bank (ECB) is expected to implement four interest rate cuts throughout the year. Still, ECB Chief Economist Philip Lane has suggested that analysts are overconfident. Lane stated in an interview published over the weekend that premature rate cuts would be “self-defeating.”

“Today’s data could encourage the ECB to speed up monetary easing but we’re now getting at the stage when bad economic news no longer translates into good news for equity markets,” Benoit Péloille, chief investment officer at Natixis Wealth Management, stated.

The post European Stocks Slip Following Weaker Economic Data appeared first on theprimarymarket.com.

The inflation rate in countries overseen by the ECB jumped to 2.2% in November compared to 2.0% in the month prior and 1.7% in September. Across the entire European Union, the inflation rate went up from 2.3% in October to 2.5% in November.

According to ECB President Christine Lagarde, the central bank forecasts more fluctuations in the near future but fully expects to reach a stable 2% inflation rate over the medium term this year.

“We have made significant progress in 2024 in bringing down inflation and hopefully 2025 is the year when we are on target as expected and as planned in our strategy,” Lagarde said. “Of course we will continue our efforts to ensure that inflation stabilizes sustainably at that 2% medium-term target.”

Since June, the ECB officials have made four interest rate cuts, each 25 basis points. The ECB benchmark interest rate is currently set at 3.15%. Further rate cuts are expected this year, with experts predicting at least four more before June.

The post ECB Expects to Reach Its 2% Inflation Target in 2025 appeared first on theprimarymarket.com.

Holzmann, who serves as the head of Austria’s central bank, Oesterreichische Nationalbank, told media outlet Kleine Zeitung that there is “nothing at the moment that would argue” against another rate cut.

“As things look at the moment, it is possible (that there will be a cut in December). There is nothing at the moment that would argue against that, but that does not mean it will automatically happen,” Holzmann said.

However, Holzmann indicated that ECB, which serves as the central bank for European Union members who use EURO as their currency, will make the final decision on the data it receives next month.

“We do not have the latest forecasts and data. We will receive those in December. We will decide on that basis, yes or no,” he added.

ECB already lowered its interest rates three times since June, each time by 25 basis points, and brought it to 3.25%. It is widely expected that policymakers will cut the rate by a quarter of a percentage point in December if the move ends up happening.

The post ECB’s Robert Holzmann Hints at December Rate Cut appeared first on theprimarymarket.com.

Euro Zone inflation in October came at 2% compared to 1.7% in the month prior and above the 1.9% estimated by economists. The surge was mainly caused by a jump in energy and food prices.

Excluding the volatile energy and food prices, inflation has maintained a steady pace of 2.7%, although economists expected a slight dip to 2.6%.

ECB President Christine Lagarde admitted that inflation is still not under control, and further climb is expected in the coming months. However, she also predicts that the target of 2% will be achieved on a stable basis in 2025.

“The objective is in sight, but I am not going to tell you that inflation is under control,” Lagarde said in an interview with French media outlet Le Monde. “We also know that inflation will rise in the coming months, simply because of base effects.”

The recent data had some economists and officials arguing for a moderate approach to further rate cuts. ECB has cut its interest rates three times since July, with another cut expected in December. Traders are currently betting that ECB’s rates will drop to 2% by the end of the next year from the current 3.25%.

The post Euro Zone Inflation Climbs Higher Than Expected, Could Lead to Moderate Rate Cuts Approach appeared first on theprimarymarket.com.

This represents the third interest rate cut in 2024, which brought the ECB’s key deposit rate to 3.25%. The central bank cut rates by 25 basis points in June, followed by another 25 basis points cut in September. The most recent cut marks the first time that the ECB lowered its borrowing rate in back-to-back meetings since 2011.

According to ECB officials, the decision to cut the rates by a further 25 basis points was prompted by “an updated assessment of the inflation outlook, the dynamics of underlying inflation, and the strength of monetary policy transmission. “

ECB’s Governing Council predicts that inflation is expected to rise in the following months before “declining to target in the course of next year.”

The major drivers behind the ECB’s decision are slow economic activity and weaker spending.

“The incoming information suggests that economic activity has been somewhat weaker than expected,” ECB president Christine Lagarde said during a press conference.

Lagarde added that she and her colleagues are not committing to any particular path when it comes to future policy decisions, while experts predict that the ECB is aiming towards a key deposit rate of 2% at some point.

The post European Central Bank Lowers Interest Rates By 25 Basis Points appeared first on theprimarymarket.com.

UniCredit recently acquired a 9% stake in Commerzbank and has asked for approval to raise its stake to 29.9% with the ultimate goal of takeover. Germany’s government, on the other hand, is openly opposed to the move and is trying to stop it.

In a recent report, Bloomberg detailed talks with several central bank officials, who said that the merger of UniCredit and Commerzbank would likely be viewed as a positive move by the European Central Bank (ECB), which would have the last say on the approval of the deal. UniCredit is considered a “well-run bank,” while the ECB would welcome the financial consolidation of the European Union and an increase in the profitability of its banks.

On the other hand, Germany’s government is currently campaigning to prevent UniCredit from acquiring a more significant stake in Commerzbank. There are hesitations about relinquishing the control of one of the country’s largest banks to a foreign company and concerns that Italy’s outstanding debt could reflect negatively on Germany in case of a financial crisis.

Germany’s supervisor, BaFin, is currently in the midst of determining whether to allow UniCredit to build its stake in Commerzbank, with the decision expected to be announced soon. 

The post UniCredit’s Takeover of Germany’s Commerzbank Likely to Get a Green Light From Regulators appeared first on theprimarymarket.com.

Bloomberg Economics weighed in on the ECB’s latest policy decision, claiming: “The ECB will lower borrowing costs by 25 basis points in October and again in December. After that we see quarterly moves as policymakers feel their way to neutral.”

A Bloomberg survey of a range of economists found that there is a broad expectation that the ECB will accelerate its policy easing as a means of bringing borrowing costs down to a level that no longer stifles the economy by the end of 2025. In China, the economy appears to be continually underperforming its target, however, in the UK, inflation appears to be slowing towards the 2% mark.

The post ECB Considering Interest Rate Cut to Drive Global Monetary Easing appeared first on theprimarymarket.com.

The reduction follows the ECB’s quarter-point cut in June and brings its interest rate to 3.5%. It was a widely expected move, considering that the Eurozone’s inflation is getting closer to the targeted inflation mark and the risk of recession is becoming more apparent.

The inflation in the Eurozone fell to 2.2% in August compared to 2.6% in the month prior. It also marked a three-year low.

According to ECB president Christine Lagarde, the rate cut was unanimously approved compared to the June reduction that saw Governor of Austria’s central bank Robert Holzmann hold out.

The traders are now seeing a significant probability of further interest rate cuts coming during the October meeting while fully expecting a reduction in December. However, the ECB reiterated that it will take all factors into consideration before deciding on the next move. 

“Our interest rate decisions will be based on our assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation, and the strength of monetary policy transmission. We are not pre-committing to a particular rate path,” ECB said in a statement.

The post European Central Bank Slashes Its Interest Rate Again appeared first on theprimarymarket.com.

After hiking interest rates to an all-time high, the ECB opted to reduce the main refinancing rate from 4.50% to 4.25%, the interest rate for the marginal lending facility from 4.75% to 4.50%, and the interest rate for the deposit facility from 4.00% to 3.75% last month. While this was seen as the beginning of a trend of steady rate cuts, the ECB opted to take a balanced approach amid persisting inflation and wage growth.

The annual euro area inflation rate was 2.5% in June, coming down from 2.6% in May and 5.5% from the same period last year. This is still above the ECB’s 2% medium-term target, which the central banks remain focused on achieving in a “timely manner.”

While the ECB said in a press release that it “does not commit itself in advance to a specific interest rate path,” the economists expect another cut in September, followed by further cuts by the end of the year and in 2025.

“According to our central scenario, the next ECB rate cut will be delivered in September and will be followed by a long and gradual sequence of 25 basis points rate cuts per quarter in December, March, June, etc., i.e. the months when new macro projections will be presented,” UBS economist Reinhard Cluse told Reuters.

The post European Central Bank Keeps Rates Intact, September Cut Likely appeared first on theprimarymarket.com.

Despite the ECB’s concerns, investors are largely expecting rate cuts to arrive in the near term due to a belief that the central bank is acting too pessimistic in its inflation outlook. Financial markets are betting that a total of 127 basis points of rate cuts will be introduced throughout the course of the year, with the first being between April and June.

“Our view remains that the weak growth outlook – with activity below potential for many quarters ahead – and falling inflation will mean cuts can happen sooner rather than later,” Peter Goves, at MFS Investment Management commented.

The post European Central Bank Pushes Back Interest Rate Cuts appeared first on theprimarymarket.com.

According to a Bloomberg poll of economists, the European Central Bank (ECB) is expected to implement four interest rate cuts throughout the year. Still, ECB Chief Economist Philip Lane has suggested that analysts are overconfident. Lane stated in an interview published over the weekend that premature rate cuts would be “self-defeating.”

“Today’s data could encourage the ECB to speed up monetary easing but we’re now getting at the stage when bad economic news no longer translates into good news for equity markets,” Benoit Péloille, chief investment officer at Natixis Wealth Management, stated.

The post European Stocks Slip Following Weaker Economic Data appeared first on theprimarymarket.com.