Latest news with #FrancescoPesole
Russia Today
2 days ago
- Business
- Russia Today
France a ‘fiscal time bomb' for EU
France's efforts to tackle its growing deficit have reignited concerns about EU stability, with financial markets bracing for the fallout, Bloomberg has reported, citing ING Groep NV strategists. The euro dropped to a one-month low this week, driven by tensions over French Prime Minister Francois Bayrou's massive deficit-cutting plan. His proposals, including slashing public sector jobs and curbing welfare spending, could fuel debate in France's minority government and undermine investor confidence, the strategists warned. In a note seen by Bloomberg, currency strategist Francesco Pesole warned on Wednesday that while the euro's decline was largely dollar-driven, it was also due to political and fiscal challenges in France. 'The French deficit story has been very much in the background as of late, but [Tuesday] probably served as a reminder that it is a ticking bomb for EU sentiment,' Pesole wrote, adding 'We could start seeing some FX spillovers in the coming months.' Bayrou's €43.8 billion ($50.9 billion) plan targets a deficit that reached 5.8% of GDP last year – double the EU's 3% limit. He warned on Tuesday that excessive debt posed a 'mortal danger' and proposed scrapping public holidays to boost productivity and freezing pensions. The proposals have faced backlash, with left-wing parties accusing the government of prioritizing military spending over social welfare. Jean-Luc Melenchon, leader of La France Insoumise, called for Bayrou's resignation, saying 'these injustices cannot be tolerated any longer.' France's military budget is slated to rise to €64 billion in 2027, double what the country spent in 2017. President Emmanuel Macron has announced an additional €6.5 billion in funding over the next two years, citing heightened threats to European security. A new defense review released this month warned of a potential 'major war' in Europe by 2030, listing Moscow among the top threats. The Kremlin has dismissed claims it is planning to attack the West, accusing NATO of using Russia as a pretext for military expansion. Bayrou, who has survived eight no-confidence motions, must secure parliamentary backing for his proposals before presenting the full budget in October. The right-wing National Rally party has opposed the cuts and called for another vote on his government.
Reuters
4 days ago
- Business
- Reuters
Sterling edges higher versus dollar as investors await jobs data
July 16 (Reuters) - The pound edged higher against a weakening dollar and fell versus the euro, as investors assessed whether the Bank of England might cut rates more aggressively than the currently expected pace of 25 basis points per quarter. Britain's annual rate of consumer price (CPI) inflation unexpectedly rose to its highest in over a year at 3.6% in June. "The bar to cutting rates faster still feels fairly high," said Francesco Pesole, a forex strategist at ING. "The risks associated with tomorrow's jobs numbers are probably preventing any larger hawkish repricing in the Sonia curve (after CPI data) and, by extension, keeping the British pound's gains contained," he added. Data showed last week Britain's economy contracted unexpectedly for a second month running in May. Sterling was last up 0.05% at $1.3390, after hitting $1.3397 on Tuesday, its lowest level since June 23. The dollar edged down against the euro and yen on Wednesday, after hitting multi-week highs the day before, as investors awaited producer price data later in the session for further clues about potential tariff-driven inflation. "Today's data won't give the Monetary Policy Committee (MPC) any sense of comfort on the inflation side," said Sanjay Raja, chief UK economist at Deutsche Bank, arguing that tomorrow's job figures "may hold more weight when it comes to shaping the monetary policy outlook." "The bar for a dovish surprise on tomorrow's labour market data will likely rise on the back of today's inflation reading." Markets priced in an 80% chance of a 25 bps rate cut in August, more than 50 bps by year-end and 75 bps by April 2026. Yields on 10-year gilts rose 1.5 bps to 4.65%. BoE Governor Andrew Bailey, on Tuesday, focused his speech on the International Monetary Fund's role in addressing the accumulation of risky imbalances in the global economy, many of which originate from the United States and China. Sterling dropped 0.1% versus the euro to 86.75 pence . It hit 86.96 per euro on Tuesday, its lowest level since April 11.
Yahoo
4 days ago
- Business
- Yahoo
Sterling edges higher versus dollar as investors await jobs data
By Stefano Rebaudo (Reuters) -The pound edged higher against a weakening dollar and fell versus the euro, as investors assessed whether the Bank of England might cut rates more aggressively than the currently expected pace of 25 basis points per quarter. Britain's annual rate of consumer price (CPI) inflation unexpectedly rose to its highest in over a year at 3.6% in June. "The bar to cutting rates faster still feels fairly high," said Francesco Pesole, a forex strategist at ING. "The risks associated with tomorrow's jobs numbers are probably preventing any larger hawkish repricing in the Sonia curve (after CPI data) and, by extension, keeping the British pound's gains contained," he added. Data showed last week Britain's economy contracted unexpectedly for a second month running in May. Sterling was last up 0.05% at $1.3390, after hitting $1.3397 on Tuesday, its lowest level since June 23. The dollar edged down against the euro and yen on Wednesday, after hitting multi-week highs the day before, as investors awaited producer price data later in the session for further clues about potential tariff-driven inflation. "Today's data won't give the Monetary Policy Committee (MPC) any sense of comfort on the inflation side," said Sanjay Raja, chief UK economist at Deutsche Bank, arguing that tomorrow's job figures "may hold more weight when it comes to shaping the monetary policy outlook." "The bar for a dovish surprise on tomorrow's labour market data will likely rise on the back of today's inflation reading." Markets priced in an 80% chance of a 25 bps rate cut in August, more than 50 bps by year-end and 75 bps by April 2026. Yields on 10-year gilts rose 1.5 bps to 4.65%. BoE Governor Andrew Bailey, on Tuesday, focused his speech on the International Monetary Fund's role in addressing the accumulation of risky imbalances in the global economy, many of which originate from the United States and China. Sterling dropped 0.1% versus the euro to 86.75 pence. It hit 86.96 per euro on Tuesday, its lowest level since April 11. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
02-07-2025
- Business
- Yahoo
Sterling nudges lower but still near multi-year highs, looking past UK politics
LONDON (Reuters) -The pound eased a touch against the dollar on Wednesday but held near its near-four-year top hit the previous day, one of the many beneficiaries of the greenback's recent weakness. Investors by and large looked through political drama in Britain where Prime Minister Kier Starmer suffered the largest parliamentary rebellion of his premiership even as he was forced to back down on key parts of a benefit-cutting package. Markets this week were more focused on hints from Bank of England governor Andrew Bailey on Tuesday that the central bank could change the BoE's quantitative tightening process - the pace of which, analysts say, has been weighing on longer dated government bonds known as gilts. "The gilt market did not react negatively to the news from the Commons, at least partly thanks to Bank of England Governor Andrew Bailey hinting at a potentially slowing quantitative tightening to give some relief to back-end liquidity. That may have helped shield sterling, too," said Francesco Pesole, currency analyst at ING, in a note. Sterling was last down 0.35% on the dollar, largely moving in line with peers, as the dollar's recent decline paused for breath. The pound hit $1.3787 on Tuesday, its highest since autumn 2021. Other European currencies such as the euro and Swiss franc are also at their strongest in years. Sterling was also a touch weaker on the euro, which was up 0.15% at 85.98 pence, an over two-month high. There is little British economic data expected for the rest of the day, though policy maker Alan Taylor will speak at the ECB's central bank conference at Sintra, Portugal. Taylor voted for a rate cut at the central bank's last meeting in June, when the rate-setting monetary policy committee voted to keep rates steady. Market pricing indicates a good chance of a BoE rate cut at their meeting next month, though it is not yet fully priced in. Fehler beim Abrufen der Daten Melden Sie sich an, um Ihr Portfolio aufzurufen. Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten
The Independent
01-07-2025
- Business
- The Independent
US dollar suffers worst start to year in more than five decades, report claims
The U.S. dollar has suffered its worst start to the year in over five decades, according to a new report. The dollar index, which measures the strength of the U.S. currency against other global currencies, has fallen more than 10 percent in the first six months of the year, the Financial Times reported. The currencies measured against the dollar are the Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona and Swiss Franc. The Financial Times reports this is the worst first half of the year for the dollar since 1973, when it was at a 15 percent loss. Currency strategist Francesco Pesole has pinned the issue to President Donald Trump's tariff war, the country's borrowing needs, and concerns about the independence of the Federal Reserve, which decides U.S. monetary policy. 'The dollar has become the whipping boy of Trump 2.0's erratic policies,' Pesole, who works for global banking company ING, told the Financial Times. Trump announced sweeping global tariffs on what he coined as 'Liberation Day' on April 2. But he shortly paused the levies on most countries for 90 days, which is set to expire on July 9. The tariffs caused chaos on Wall Street, with over six trillion in market losses, according to the Wall Street Journal. Trump says he is not planning to extend the tariff pause, telling Fox News during a taped interview broadcasted Sunday: 'We'll look at how a country treats us — are they good, are they not so good — some countries we don't care, we'll just send a high number out.' The president's domestic policies are also causing concern, even among members of his own party. The U.S. is currently more than $36 trillion in debt, according to the Treasury Department. Trump's tax cut bill, which he has coined the 'big, beautiful bill,' will add almost $3.3 trillion to the national debt in the next nine years, the Congressional Budget Office estimates. Trump has also pressured Jerome Powell, chair of the Federal Reserve, to cut interest rates. But Powell has held firm that the central bank will not lower borrowing costs, at least at this time. Under Powell's leadership, the Fed had cut interest rates three times in 2024, after raising them 11 times in 2022 and 2023 to curb high inflation, which hit the U.S. after the Covid-19 pandemic. 'For the time being, we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance,' Powell said last week. While Powell has not given in to Trump's demands, his term ends next May. Traders are expecting the new chair, who will be hand-selected by the president, to deliver at least five quarter-point cuts by the end of 2026, the Financial Times reported last week.
