Latest news with #ChristineLagarde
See - Sada Elbalad
3 hours ago
- Business
- See - Sada Elbalad
ECB Holds Rates Steady amid Trade Tariff Uncertainty
Taarek Refaat The European Central Bank (ECB) left interest rates unchanged on Thursday for the first time in more than a year, as inflation settled at 2% and policymakers awaited clarity on ongoing trade tariff negotiations with the United States. The ECB maintained its deposit rate at 2%, in line with the expectations of a vast majority of economists surveyed by Bloomberg. With uncertainty surrounding potential tariff levels, the bank offered no guidance on the direction of future policy moves. 'Inflation is now at the medium-term target of 2%,' the ECB said in its official statement. 'The economy has shown resilience in a challenging global environment. However, the outlook remains highly uncertain, particularly due to ongoing trade disputes.' The central question now is whether the ECB will resume its rate-cutting cycle, which has seen eight reductions since June 2024, or if the monetary easing campaign has reached its conclusion. ECB President Christine Lagarde noted that the central bank is well-positioned to address not just trade tensions but also other structural challenges, including a stronger euro and anticipated increases in public infrastructure and defense spending. Markets remain confident that at least one more rate cut is likely by year-end. Analysts surveyed ahead of Thursday's decision anticipate a final 25-basis-point cut in September. Following the announcement, bond markets held steady, with Germany's 10-year yield rising by 3 basis points to 2.67%. The euro remained relatively stable, slipping just 0.1% to $1.1755. Lagarde is expected to give an update on the economic outlook for the 20-member eurozone during a press conference in Frankfurt at 2:45 p.m. CET. In its previous meeting in June, the ECB warned that aggressive U.S. tariffs could significantly slow eurozone growth and drag inflation below target. The ECB meeting comes just a week ahead of a deadline set by U.S. President Donald Trump for the European Union to finalize a trade agreement. While the EU has prepared a package of retaliatory tariffs that could have broad economic consequences, sources close to the talks remain cautiously optimistic about reaching a deal. Diplomatic insiders say the two sides are narrowing the gap, with a proposed tariff range around 15% still under negotiation. read more CBE: Deposits in Local Currency Hit EGP 5.25 Trillion Morocco Plans to Spend $1 Billion to Mitigate Drought Effect Gov't Approves Final Version of State Ownership Policy Document Egypt's Economy Expected to Grow 5% by the end of 2022/23- Minister Qatar Agrees to Supply Germany with LNG for 15 Years Business Oil Prices Descend amid Anticipation of Additional US Strategic Petroleum Reserves Business Suez Canal Records $704 Million, Historically Highest Monthly Revenue Business Egypt's Stock Exchange Earns EGP 4.9 Billion on Tuesday Business Wheat delivery season commences on April 15 News Israeli-Linked Hadassah Clinic in Moscow Treats Wounded Iranian IRGC Fighters Arts & Culture "Jurassic World Rebirth" Gets Streaming Date News China Launches Largest Ever Aircraft Carrier Videos & Features Tragedy Overshadows MC Alger Championship Celebration: One Fan Dead, 11 Injured After Stadium Fall Lifestyle Get to Know 2025 Eid Al Adha Prayer Times in Egypt Arts & Culture South Korean Actress Kang Seo-ha Dies at 31 after Cancer Battle Business Egyptian Pound Undervalued by 30%, Says Goldman Sachs Sports Get to Know 2025 WWE Evolution Results News "Tensions Escalate: Iran Probes Allegations of Indian Tech Collaboration with Israeli Intelligence" News Flights suspended at Port Sudan Airport after Drone Attacks
Khaleej Times
3 hours ago
- Business
- Khaleej Times
ECB keeps rates steady as it awaits clarity over trade
The European Central Bank left interest rates unchanged on Thursday after cutting eight times in a year, biding its time while Brussels and Washington negotiate over trade. The ECB cut its policy rate to 2% last month, halving it from 4% a year earlier, after taming a surge in prices that followed the end of the COVID-19 pandemic and Russia's full-scale invasion of Ukraine in 2022. With inflation now back at the ECB's 2% goal and expected to stay there, policymakers chose to stay put on Thursday, just as trade talks between the European Union and Donald Trump's U.S. administration appeared to be in their final stretch. The ECB's policy-making Governing Council painted a balanced picture of the economy, with near-term uncertainty over trade offset by public investment further down the road. "Partly reflecting the Governing Council's past interest rate cuts, the economy has so far proven resilient overall in a challenging global environment," the ECB said. "At the same time, the environment remains exceptionally uncertain, especially because of trade disputes." As ECB President Christine Lagarde and her colleagues were in the middle of their meeting late on Wednesday, EU diplomats said the two sides were heading towards a deal that would result in a broad tariff of 15% on U.S. imports of European Union goods. This would be roughly halfway between the ECB's baseline and severe scenarios for the euro zone economy presented last month, but milder than Trump's threatened 30%. The ECB's estimate showed that higher U.S. tariffs would result in lower growth and, depending on the extent of EU retaliation, inflation in the euro zone over the medium term. "If the two sides indeed conclude such a deal, it would support our call that the euro zone economy can regain momentum from the fourth quarter onwards and that the ECB will not need to cut rates further," Berenberg economist Holger Schmieding said. In its statement the ECB said it would decide "meeting by meeting ... based on its assessment of the inflation outlook and the risks surrounding it". Money markets were still pricing in a further interest rate reduction, probably by March, as inflation was seen at risk of going too low. Even the ECB's baseline projection from June, which incorporates 10% tariffs from the United States, saw price growth below 2% over the next 18 months. "Even in the case of a benign outcome (i.e. U.S. tariffs around 10%) we still see scope for further easing as the disinflation process broadens," MUFG's Europe economist Henry Cook said. The euro zone economy is showing some tentative sign of acceleration but growth remains modest. Companies, while still optimistic about an upturn ahead, report starting to feel the pinch from tariffs on their profits. On the bright side, euro zone banks have seen rising loan demand and policy uncertainty has not yet translated into an economic or market downturn. After a short-lived selloff in April investors have taken the trade turmoil in their stride, with European equity indices close to new highs also thanks to Germany's newly found appetite for spending. In fact, erratic policy-making in the United States, including Trump's relentless criticism of the Federal Reserve, has lured foreign investors to euro zone assets. That briefly pushed the euro to its highest level against the dollar since September 2021 at $1.1829 earlier this month. ECB board member and outspoken hawk Isabel Schnabel even said the central bank should watch out for price hikes caused by tariffs and that the bar for further cuts was "very high". But the euro's appreciation has unnerved other policymakers, who fear a stronger currency would make European exports less competitive and contribute to pushing down inflation. "On that front, we would expect Christine Lagarde to strike a reassuring tone, reminding people that the ECB does not target exchange rates but that any resulting downward pressure on inflation will be addressed, if necessary," Julien Lafargue, chief market strategist at Barclays Private Bank, said.
Business Recorder
6 hours ago
- Business
- Business Recorder
European shares close higher after ECB leaves rates unchanged
FRANKFURT: European stocks closed higher on Thursday after the European Central Bank held interest rates steady as expected, while investors cheered strong earnings from major banks and easing trade tensions with the United States. The pan-European STOXX 600 index finished the session 0.2% higher, having earlier touched a six-week high. Stocks pulled back from their peaks as investors recalibrated their expectations for future monetary easing after ECB President Christine Lagarde said policymakers were more keen on the outlook on trade and its impact on the economy before deciding on further interest rate cuts. Interest rate futures markets reflected this shift in sentiment, with traders scaling back bets on a September rate cut. The yield on the 2-year German bond also spiked, and weighed on equity markets. 'At 2%, rates remain squarely to the middle of the ECB's 1.5% to 2.5% neutral range. Uncertainty is highly elevated, however, and, if trade tensions escalate, further easing may well be required later in the year to help support business and consumer confidence,' said Marchel Alexandrovich, an economist at Saltmarsh Economics. The central bank's cautious stance comes as eurozone inflation has returned to the ECB's 2% target alongside signs of economic resilience. Still, sentiment was largely buoyant on expectations of a US-EU trade deal after the European Commission said that an agreement was within reach, where tariffs on European exports to the US would likely settle down at 15% from a harsher 30% levy planned from August 1. In a busy day for corporate results, banks were in a bright spot after second-quarter profit beats from Deutsche Bank and BNP Paribas. German lender Deutsche Bank jumped 9.1%, while French bank BNP Paribas added 0.4% after a near 3% jump earlier in the day. The eurozone banks index touched its highest since 2008. Reckitt raised its annual revenue forecast after the consumer goods company's second-quarter net sales growth topped expectations, sending shares soaring 10%. Cooling trade tensions have lifted the STOXX 600 about 18% from its lows in April after US President Donald Trump slapped steep tariffs on its trading partners. The index still remains about 2% away from its March historic high.
Business Times
9 hours ago
- Business
- Business Times
Europe: Shares close higher after ECB leaves rates unchanged
EUROPEAN stocks closed higher on Thursday after the European Central Bank held interest rates steady as expected, while investors cheered strong earnings from major banks and easing trade tensions with the United States. The pan-European Stoxx 600 index finished the session 0.24 per cent higher at 551.55, having earlier touched a six-week high. Stocks pulled back from their peaks as investors recalibrated their expectations for future monetary easing after ECB President Christine Lagarde said policymakers were more keen on the outlook on trade and its impact on the economy before deciding on further interest rate cuts. Interest rate futures markets reflected this shift in sentiment, with traders scaling back bets on a September rate cut. The yield on the 2-year German bond also spiked, and weighed on equity markets. 'At 2 per cent, rates remain squarely to the middle of the ECB's 1.5 per cent to 2.5 per cent neutral range. Uncertainty is highly elevated, however, and, if trade tensions escalate, further easing may well be required later in the year to help support business and consumer confidence,' said Marchel Alexandrovich, an economist at Saltmarsh Economics. The central bank's cautious stance comes as eurozone inflation has returned to the ECB's 2 per cent target alongside signs of economic resilience. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Still, sentiment was largely buoyant on expectations of a US-EU trade deal after the European Commission said that an agreement was within reach, where tariffs on European exports to the US would likely settle down at 15 per cent from a harsher 30 per cent levy planned from Aug 1. In a busy day for corporate results, banks were in a bright spot after second-quarter profit beats from Deutsche Bank and BNP Paribas. German lender Deutsche Bank jumped 9.1 per cent, while French bank BNP Paribas added 0.4 per cent after a near 3 per cent jump earlier in the day. The eurozone banks index touched its highest since 2008. Reckitt raised its annual revenue forecast after the consumer goods company's second-quarter net sales growth topped expectations, sending shares soaring 10 per cent. Cooling trade tensions have lifted the Stoxx 600 about 18 per cent from its lows in April after US President Donald Trump slapped steep tariffs on its trading partners. The index still remains about 2 per cent away from its March historic high. Roche gained 1.4 per cent after the Swiss drugmaker reported better-than-expected first-half operating profit, while Deutsche Telekom rose 5 per cent after its US subsidiary T-Mobile posted strong second-quarter results. Both were among the major boosts to the benchmark Stoxx 600. Meanwhile, Nestle dropped 4.6 per cent after the Swiss consumer major announced a strategic review of its vitamins business and posted first-half results. Chipmaker STMicro slumped 16.6 per cent - its biggest one-day drop on record - after its first quarterly loss in more than a decade, in contrast to other tech titans Alphabet and SK beating earnings expectations. On the data front, a latest survey showed euro zone business activity accelerated faster than forecast this month. REUTERS
Glasgow Times
13 hours ago
- Business
- Glasgow Times
ECB leaves interest rates unchanged as it assesses impact of Trump tariffs
The bank's governing council announced on Thursday at its headquarters in Frankfurt that it would leave its benchmark deposit rate at 2%. 'The economy has so far proven resilient overall in a challenging global environment,' said bank president Christine Lagarde at her post-decision news conference. 'At the same time, the environment remains exceptionally uncertain, especially because of trade disputes.' The ECB has already cut rates eight times since June of last year and Ms Lagarde said after the last policy meeting on June 5 that the central bank is 'getting to the end of a monetary policy cycle'. US President Donald Trump sent the EU a letter informing officials of a potential 30% tariff (Julia Demaree Nikhinson/AP) The monetary authority for the 20 countries that use the euro currency has been lowering rates to support growth after raising them in 2022-2023 to snuff out inflation caused by Russia's invasion of Ukraine and the rebound after the pandemic. With the benchmark rate now at 2%, down from a record high of 4%, analysts think there could be one more rate cut coming, but only in September. The reason, say analysts: The ECB's policymakers simply do not know the outcome of talks between the EU's executive commission and the Trump administration. Mr Trump first set a 20% tariff for EU goods, then threatened 50% after expressing displeasure at the pace of talks, then sent the EU a letter informing officials of a potential 30% tariff. EU officials earlier held out hope of winning at least the 10% baseline that applies to almost all trade partners, and analysts think the actual rate may be lower than Mr Trump's tariff threats. The talks are up against an August 1 deadline, but earlier deadlines have slipped as the sides kept talking. With signs of economic activity holding up reasonably well, the ECB can afford to wait and see what the outcome of trade negotiations will be. Higher tariffs, or import taxes, on European goods would mean sellers would have to either increase prices for US consumers – risking loss of market share – or swallow the added cost in terms of lower profits. In either case, higher tariffs would hurt export earnings for European firms and slow the economy, which would strengthen the case for another rate cut in September. The ECB's rate cuts have helped support economic activity by lowering the cost of credit for consumers and businesses to purchase goods. Higher rates have the opposite effect and are used to cool off inflation by reducing demand for goods. Growth in the eurozone was relatively strong at 0.6% in the first quarter – though that was partly thanks to rushed shipments of goods trying to beat the tariffs. Inflation has fallen from double digits in late 2022 to 2% in June, in line with the ECB's target. A stronger euro, which lowers the price of imports, and softer global prices for oil have helped keep inflation moderate. The stronger euro, up 13% this year at 1.17 dollars, has attracted attention as a potential damper on growth and ECB vice president Luis de Guindos said any rapid moves over 1.20 dollars could be 'much more complicated'. But the ECB typically does not target the exchange rate, and the euro's rise is considered to be less the result of Europe's strength and more the result of a weaker dollar weighed down by investor uncertainty about the future path of inflation, growth and government debt in the US.
