Latest news with #EU-harmonised
RTÉ News
30-06-2025
- Business
- RTÉ News
German inflation eases to 2% in June, defying forecasts
German inflation eased in June, preliminary data from the federal statistics office showed today, despite forecasts suggesting a slight increase in price pressures in Europe's largest economy. German inflation fell to 2% year on year. Analysts polledby Reuters had forecast EU-harmonised inflation increasing from the previous month to 2.2%. Germany's core inflation rate, which excludes volatile food and energy prices, eased to 2.7% in June from 2.8% the previous month. The German data comes ahead of the euro zone inflation release tomorrow. Inflation in the bloc is expected at 2% in June, the European Central Bank's goal, up from 1.9% the previous month, according to economists polled by Reuters. Data published on Friday showed that EU-harmonised inflation rose in France and Spain. Inflation was unchanged in Italy, data showed today. Overall, the figures add to the evidence that inflation in the euro zone has sustainably returned to the target, said Franziska Palmas, senior Europe economist at Capital Economics. "Barring a renewed surge in energy prices we expect the headline rate to average 2% this year and the ECB to make one final rate cut in September," Palmas said. The ECB cut interest rates at the beginning of June but hinted at a pause in its year-long easing cycle. "The German figure signals to the ECB that it has done its job," said Alexander Krueger, chief economist at Hauck Aufhaeuser Lampe, who forecast the inflation rate in Germany would remain at 2% or even dip lower in the coming months,"right where it is supposed to be." Inflation data show that German energy prices fell by 3.5% in June compared to the previous year. While food prices rose 2%, that marked a significant decline from the 2.8% year-on-year increases recorded in May and April. Services inflation, which has been stubbornly high, fell to 3.3% in June from 3.4% in the previous month. "People may still complain about service prices, but due to the relief from energy prices, their still-high increase is hardly noticeable," said Krueger. Despite the positive developments, Commerzbank's chief economist Joerg Kraemer warned that core inflation could remain higher than targeted "for longer than the ECB intends" due to the emerging economic recovery in Germany. German retail sales in surprise 1.6% drop in May Earlier figures showed that German retail sales unexpectedly fell by 1.6% in May compared with the previous month, dampening hopes for strong growth in the second quarter for Europe's largest economy. Analysts polled by Reuters had predicted a 0.5% increase, after sales declined by 0.6% in April. While there could be some recovery in June, a large and sustained jump in consumption is not expected for the time being, said Hauck Aufhaeuser Lampe economist Alexander Krueger. That could spell problems for economic growth in the second quarter after unexpectedly robust growth in the first, thanks in part to consumer spending. "The strong growth seen in the first quarter will not be repeated," said VP Bank economist Thomas Gitzel. "The German economy will have to scale back its ambitions in the second quarter," he added. Consumer sentiment in Germany dipped to -20.3 points heading into July in the most recent survey conducted by the GfK market research institute and the Nuremberg Institute for Market Decisions (NIM). That survey of around 2,000 people found an increased willingness to save - due to continuing uncertainty - was counteracting positive momentum in income prospects.
Reuters
30-06-2025
- Business
- Reuters
German inflation eases to 2.0% in June
BERLIN, June 30 (Reuters) - German inflation eased in June, preliminary data from the federal statistics office showed on Monday, despite forecasts suggesting a slight increase in price pressures in Europe's largest economy. German inflation fell to 2.0% year on year. Analysts polled by Reuters had forecast EU-harmonised inflation increasing from the previous month to 2.2%. Germany's core inflation rate, which excludes volatile food and energy prices, eased to 2.7% in June from 2.8% the previous month. The German data comes ahead of the euro zone inflation release on Tuesday. Inflation in the bloc is expected at 2.0% in June, the European Central Bank's goal, up from 1.9% the previous month, according to economists polled by Reuters. The ECB cut interest rates at the beginning of June but hinted at a pause in its year-long easing cycle. Meanwhile, German import prices decreased by 1.1% year on year in May, the statistics office said on Monday.
Mint
30-06-2025
- Business
- Mint
Euro zone yields drop slightly, trade talks, US data in focus
June 30 - Euro zone government bond yields edged down on Monday as investors slightly increased bets on European Central Bank rate cuts after inflation data from German states. Inflation fell in three important German states in June, suggesting the country's national inflation rate could ease. Italian EU-harmonised consumer prices readings were slightly below a median forecast. Meanwhile, German retail sales and import prices fell short of expectations in May. Trade talks are also in the spotlight after Canada scrapped its digital services tax targeting U.S. technology firms in a bid to advance stalled trade negotiations with the U.S. German 10-year yield, the euro area's benchmark, dropped 2 basis points to 2.58%. Lending growth was little changed across the euro zone in May, indicating that the support provided by the ECB's string of interest rates cuts was offset by souring economic sentiment. Money markets priced in an ECB depo rate at 1.74% in December from 1.76% before inflation data. The deposit facility rate is currently at 2%. Markets await U.S. jobs data later this week, which are crucial for the Federal Reserve's monetary policy path. "The relative strength of the labour market is precisely what allows the Fed to be patient and wait for more clarity on the impact of tariff increases on the real economy," said Bruno Cavalier, chief economist at Oddo. U.S. President Donald Trump repeatedly criticised Fed Chair Jerome Powell for not cutting rates and said on Friday that he would "love" it if Powell were to resign and rates were at 1%. The 30-year yield was down one bp at 3.09%, after reaching last week 3.119%, its highest level since May 26. The 2-year – more sensitive to expectations for European Central Bank policy rates – was down 1.5 bps at 1.85%. The German yield curve steepened last week, with the spread between 10-year and 2-year yields recording the first weekly rise in a month. The curve steepened as markets have priced in an ECB terminal rate roughly unchanged at around 1.75–1.80%, while yields on longer maturities rise amid expectations of a significant increase in German fiscal spending. Italy's 10-year yields fell 2 bps to 3.49%, with the spread between BTPs and Bund yields at 90 bps. It hit 84.20 bps earlier this month, its lowest since March 2015. Citi expects most euro zone bond spreads to tighten against Bunds by year-end, led by Bonos and BTPs, with target levels at 50 and 75 bps basis points respectively. Citi argued that the "view finds support from the front-loaded German fiscal stimulus announced last week," and that "the increased NATO target for defence spending is a fiscal risk" for Italy and Spain. German lawmakers passed a multi-billion-euro package to support companies and boost investment. This article was generated from an automated news agency feed without modifications to text.
Business Recorder
28-06-2025
- Business
- Business Recorder
Dollar lower against euro
NEW YORK: The dollar hit a fresh three-and-a-half-year low against the euro on Friday as traders bet that the Federal Reserve will cut rates more times and possibly sooner than previously expected as some US data points to a weakening economy. A report on Friday showed that US consumer spending unexpectedly fell in May as the boost from the pre-emptive buying of goods like motor vehicles ahead of tariffs faded, while monthly inflation increases remained moderate. A weekly jobs report on Thursday showed that continuing unemployment claims rose to the highest level since November 2021 while gross domestic product figures for the first quarter reflected a sharp downgrade to consumer spending. 'Some of the data that we've had has not been particularly good over the last few days,' said Lou Brien, strategist at DRW Trading in Chicago. Fed Chair Jerome Powell's testimony to US Congress this week was interpreted as dovish after he noted that rate cuts are likely if inflation doesn't increase this summer as he expects. Reports that US President Donald Trump could also appoint a replacement for Powell in the coming months have added to dollar weakness. The new Fed chair is expected to be more dovish and an early appointment could undermine Powell's influence by acting as a shadow chair before Powell's term ends in May. Trump has not decided on Powell's replacement and a decision isn't imminent, a person familiar with the White House's deliberations said on Thursday. The dollar index fell 0.15% to 97.23 while the euro was last up 0.21% to $1.1723. The single currency reached $1.1754, the highest since September 2021. The euro got a small uplift after data showed French consumer prices rose more than expected in June, while Spain's 12-month EU-harmonised inflation also inched higher. Fed rate cuts would reduce the interest rate advantage of the dollar relative to peers. Traders are pricing in 65 basis points of cuts by year end, up from 46 basis points a week ago. The long-term outlook for the dollar is also seen as challenging as foreign investors reevaluate the 'American exceptionalism' that has drawn investment to the country. Brien said that the impact of the Biden administration's policies was also still weighing on the currency. Former President Joe Biden cut off Russia's access to the US dollar, froze its assets and imposed sanctions following the country's invasion of Ukraine in 2022, which analysts say led other countries to accelerate shifts away from US dollar reliance. Against the Japanese yen, the dollar strengthened 0.19% to 144.65. Core consumer inflation in Japan's capital slowed sharply in June due to temporary cuts to utility bills but stayed well above the central bank's 2% target, keeping alive market expectations for further interest rate hikes. In cryptocurrencies, bitcoin fell 1.13% to $106,594.
Yahoo
30-05-2025
- Business
- Yahoo
Italy May EU-harmonised CPI decelerates to 1.9% y/y, in line with forecast
ROME (Reuters) -Italian EU-harmonised consumer prices (HICP) rose 0.1% month-on-month in May and the annual inflation rate decelerated to 1.9%, preliminary figures by official statistics agency ISTAT showed on Friday. A Reuters survey of 21 analysts had pointed to a flat month-on-month reading and a 1.9% year-on-year rise. Core inflation (net of fresh food and energy) was running at 2.1% year-on-year on the HICP index in May, like in April. ISTAT also reported that the main domestic price index (NIC), was flat on the month and down to 1.7% annually in May, following a 1.9% annual rate the previous month. Sign in to access your portfolio
