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.

While the government of French President Emmanuel Macron is looking to reduce spending over the coming years, the current plan isn’t expected to fall below the European Union limit of 3% of gross domestic product until 2027.

Still, the IMF’s chief economist believes that the French government is on the right track to reducing the deficit. “The budget path that the government is planning is going in the right direction,” Gourinchas said, going on to suggest that “it’s perhaps moving a little too slowly.” Given that it still appears to be too early to lower interest rates given the current state of the fight against inflation, the economist suggested that the government pursue other policies to bring about faster change.

The post France Unlikely To Reach Budget Deficit Target, IMF Claims appeared first on theprimarymarket.com.

This comes after marginally cooler eurozone inflation data was released on Monday, along with optimistic eurozone economic growth figures. “Markets are showing signs of summer liquidity as investors take a much-deserved break,” Mohit Kumar, chief financial economist of Europe at Jefferies observed.

Following a sharp rise in European interest rates over the past 12 months, European Central Bank (ECB) President Christine Lagarde indicated a possibility that the central bank may pause its rate hikes in September, thereby providing some relief to European bonds.

Manufacturing activity in July contracted at its fastest pace since the COVID pandemic, as was expected by analysts. This data, in contrast with positive inflation and economic growth data, has created a cloudy economic outlook for the eurozone.

The post Eurozone Bonds Hold Steady Amid Uncertain Economic Landscape appeared first on theprimarymarket.com.

ECB President Christine Lagarde appeared to confirm an interest rate hike when the central bank’s governing council meets in Frankfurt on Thursday, explaining “we cannot waver, and we cannot declare victory yet.”

With the ECB’s rate hiking agenda nearing its conclusion, analysts are now debating whether or not the central bank will raise rates yet again in September or if July will be its last increase.

Currently, euro zone inflation is standing at 5.5; down from the double-digit peak in October but still far off the ECB’s target of 2%. The ECB’s rate hikes in the fight against inflation are the fastest since the euro was introduced in 1999. The whole euro zone economy fell slightly during the first three months of the year. Preliminary figures for the second quarter are expected on Monday.

The post ECB Set to Raise Interest Rates as Hiking Agenda Nears End appeared first on theprimarymarket.com.

Data from Epex Spot SE on Saturday showed that energy prices are negative in nearly a dozen countries across the European continent, including Germany, France, the Netherlands, and the UK. Prices in the Netherlands are set to fall as low as -€73.76 per megawatt hour by Sunday afternoon.

Negative power prices are believed to be a result of a record number of solar panels being added to European homes last year, a move that helped to curb overinflated natural gas prices. For the first time this summer, the EU’s monthly solar power generation surpassed that of coal-powered electricity.

“Negative pricing is an important signal in the electricity system to incentivize flexibility and storage, which is critical to a modern-day electricity system,” Tom Haddon, a consultant at Arcadis LLP remarked. The influx of renewable energy consumption is helping to costs for grid operators while making it easier for them to keep the system in balance.

The post European Energy Prices to Plummet Amid Solar Boom 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.

“Travelers who haven’t booked their summer trips to Europe aren’t going to want to hear this… If you’re booking a European vacation now, you are definitely paying a premium for your procrastination,” Berg commented in an interview with Yahoo Finance Live.

Airfare from the U.S. to Europe costs $1,196 on average this summer, compared to just $500 in 2021. This is the highest average plane ticket price from the U.S. to Europe since 2018.

While London, Paris, and Rome remain popular travel destinations, Berg suggested that many tourists may decide to target alternative destinations for a more affordable vacation package. Berg mentioned Portugal as a personal favorite, explaining that the Iberian country is expected to remain cheaper than other European destinations over the next year and a half.

Berg added that in order to secure a reasonable vacation deal, travelers should consider embarking on their trip in early fall and planning three to four months in advance.

The post U.S. Travelers to Europe Expected to Pay a Premium, Economist Claims appeared first on theprimarymarket.com.

Both the U.S. and German 2-year bond yields were pushed higher, reaching 4.8% and 3.1% respectively. This is both yields’ highest levels since March.

Equities were also hampered, with blue chip stocks listed in London, Paris, and Frankfurt dipping by an average of 0.2%. In contrast, MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.7%; a two-month high.

In Asia, the Bank of Japan (BoJ) seems set to stick with its loose monetary policy when it reconvenes on Friday. The yen slumped to a six-month low on Thursday, dropping 1% to 141.50 per dollar.

“Dollar-yen is at year highs and markets are increasingly beginning to talk about whether a further rise could trigger the BoJ to verbally and also effectually intervene in the FX market,” Danske Bank’s head of FX research Kristoffer Kjær Lomholt remarked.

Brent oil remained steady at $73.29 per barrel, while gold slipped to a two-week low of $1,934 an ounce. The dollar rose slightly from its four-week low against a basket of other major world currencies.

The post Global Stocks Slip as ECB Prepares to Make Interest Rate Decision 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.

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.

While the government of French President Emmanuel Macron is looking to reduce spending over the coming years, the current plan isn’t expected to fall below the European Union limit of 3% of gross domestic product until 2027.

Still, the IMF’s chief economist believes that the French government is on the right track to reducing the deficit. “The budget path that the government is planning is going in the right direction,” Gourinchas said, going on to suggest that “it’s perhaps moving a little too slowly.” Given that it still appears to be too early to lower interest rates given the current state of the fight against inflation, the economist suggested that the government pursue other policies to bring about faster change.

The post France Unlikely To Reach Budget Deficit Target, IMF Claims appeared first on theprimarymarket.com.

This comes after marginally cooler eurozone inflation data was released on Monday, along with optimistic eurozone economic growth figures. “Markets are showing signs of summer liquidity as investors take a much-deserved break,” Mohit Kumar, chief financial economist of Europe at Jefferies observed.

Following a sharp rise in European interest rates over the past 12 months, European Central Bank (ECB) President Christine Lagarde indicated a possibility that the central bank may pause its rate hikes in September, thereby providing some relief to European bonds.

Manufacturing activity in July contracted at its fastest pace since the COVID pandemic, as was expected by analysts. This data, in contrast with positive inflation and economic growth data, has created a cloudy economic outlook for the eurozone.

The post Eurozone Bonds Hold Steady Amid Uncertain Economic Landscape appeared first on theprimarymarket.com.

ECB President Christine Lagarde appeared to confirm an interest rate hike when the central bank’s governing council meets in Frankfurt on Thursday, explaining “we cannot waver, and we cannot declare victory yet.”

With the ECB’s rate hiking agenda nearing its conclusion, analysts are now debating whether or not the central bank will raise rates yet again in September or if July will be its last increase.

Currently, euro zone inflation is standing at 5.5; down from the double-digit peak in October but still far off the ECB’s target of 2%. The ECB’s rate hikes in the fight against inflation are the fastest since the euro was introduced in 1999. The whole euro zone economy fell slightly during the first three months of the year. Preliminary figures for the second quarter are expected on Monday.

The post ECB Set to Raise Interest Rates as Hiking Agenda Nears End appeared first on theprimarymarket.com.

Data from Epex Spot SE on Saturday showed that energy prices are negative in nearly a dozen countries across the European continent, including Germany, France, the Netherlands, and the UK. Prices in the Netherlands are set to fall as low as -€73.76 per megawatt hour by Sunday afternoon.

Negative power prices are believed to be a result of a record number of solar panels being added to European homes last year, a move that helped to curb overinflated natural gas prices. For the first time this summer, the EU’s monthly solar power generation surpassed that of coal-powered electricity.

“Negative pricing is an important signal in the electricity system to incentivize flexibility and storage, which is critical to a modern-day electricity system,” Tom Haddon, a consultant at Arcadis LLP remarked. The influx of renewable energy consumption is helping to costs for grid operators while making it easier for them to keep the system in balance.

The post European Energy Prices to Plummet Amid Solar Boom 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.

“Travelers who haven’t booked their summer trips to Europe aren’t going to want to hear this… If you’re booking a European vacation now, you are definitely paying a premium for your procrastination,” Berg commented in an interview with Yahoo Finance Live.

Airfare from the U.S. to Europe costs $1,196 on average this summer, compared to just $500 in 2021. This is the highest average plane ticket price from the U.S. to Europe since 2018.

While London, Paris, and Rome remain popular travel destinations, Berg suggested that many tourists may decide to target alternative destinations for a more affordable vacation package. Berg mentioned Portugal as a personal favorite, explaining that the Iberian country is expected to remain cheaper than other European destinations over the next year and a half.

Berg added that in order to secure a reasonable vacation deal, travelers should consider embarking on their trip in early fall and planning three to four months in advance.

The post U.S. Travelers to Europe Expected to Pay a Premium, Economist Claims appeared first on theprimarymarket.com.

Both the U.S. and German 2-year bond yields were pushed higher, reaching 4.8% and 3.1% respectively. This is both yields’ highest levels since March.

Equities were also hampered, with blue chip stocks listed in London, Paris, and Frankfurt dipping by an average of 0.2%. In contrast, MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.7%; a two-month high.

In Asia, the Bank of Japan (BoJ) seems set to stick with its loose monetary policy when it reconvenes on Friday. The yen slumped to a six-month low on Thursday, dropping 1% to 141.50 per dollar.

“Dollar-yen is at year highs and markets are increasingly beginning to talk about whether a further rise could trigger the BoJ to verbally and also effectually intervene in the FX market,” Danske Bank’s head of FX research Kristoffer Kjær Lomholt remarked.

Brent oil remained steady at $73.29 per barrel, while gold slipped to a two-week low of $1,934 an ounce. The dollar rose slightly from its four-week low against a basket of other major world currencies.

The post Global Stocks Slip as ECB Prepares to Make Interest Rate Decision 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.