Tankmaker KNDS Explores IPO, Stake Sale as Buyout Firms Circle
The family members behind Krauss-Maffei Wegmann, which merged with France's Nexter to create KNDS, have informed the German government that they're considering selling part of their 50% stake and looking at options including an IPO and partial divestment, said the people. As part of this, Berlin is in the early stages of studying the purchase of a blocking minority of 25.1%, according to some of the people.
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Yahoo
14 minutes ago
- Yahoo
Europe's central bank to hold off on another rate cut until it knows how bad the tariff blow will be
FRANKFURT, Germany (AP) — The European Central Bank will likely hold off on making another interest rate cut Thursday, choosing to wait until it can measure the size of any economic blow from higher U.S. tariffs. The ECB has already cut rates eight times since June of last year and President Christine Lagarde said after the last policy meeting June 5 that the central bank is 'getting to the end of a monetary policy cycle." 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 bench mark rate now at 2%, down from a record high of 4%, analyst think there could be one more rate cut coming, but only in September. The reason, say analysts: The ECB's policymakers simply don't know the outcome of talks between the EU's executive commission and the Trump administration. 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 that the actual rate may be lower than Trump's tariff threats. The talks are up against an Aug. 1 deadline, but earlier deadlines have slipped as the sides kept talking. The decision to hold rates unchanged will be 'uncontroversial' among members of the bank's rate-setting council, said analysts at UniCredit's Investment Institute. 'In light of recent events, the risk of an adverse tariff scenario has increased since the June ECB meeting. The 30% tariff on EU goods threatened by the US is much higher than generally expected,' the UniCredit analysts wrote. "However, the response of financial markets to US President Donald Trump's letter to the EU has been muted, and this seems to reflect expectations that the landing point for tariffs on EU goods will be materially below 30%. 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.' 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 of inflation by reducing demand for goods. Growth in the eurozone was relatively strong at 0.6% in the first quarter - though that was partly due 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, has attracted attention as a potential damper on growth and ECB Vice President Luis de Guindos said any rapid moves over $1.20 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. David Mchugh, The Associated Press Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Washington Post
16 minutes ago
- Washington Post
Europe's central bank to hold off on another rate cut until it knows how bad the tariff blow will be
FRANKFURT, Germany — The European Central Bank will likely hold off on making another interest rate cut Thursday, choosing to wait until it can measure the size of any economic blow from higher U.S. tariffs . The ECB has already cut rates eight times since June of last year and President Christine Lagarde said after the last policy meeting June 5 that the central bank is 'getting to the end of a monetary policy cycle.' 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 bench mark rate now at 2%, down from a record high of 4%, analyst think there could be one more rate cut coming, but only in September. The reason, say analysts: The ECB's policymakers simply don't know the outcome of talks between the EU's executive commission and the Trump administration. 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 that the actual rate may be lower than Trump's tariff threats. The talks are up against an Aug. 1 deadline, but earlier deadlines have slipped as the sides kept talking. The decision to hold rates unchanged will be 'uncontroversial' among members of the bank's rate-setting council, said analysts at UniCredit's Investment Institute. 'In light of recent events, the risk of an adverse tariff scenario has increased since the June ECB meeting. The 30% tariff on EU goods threatened by the US is much higher than generally expected,' the UniCredit analysts wrote. 'However, the response of financial markets to US President Donald Trump's letter to the EU has been muted, and this seems to reflect expectations that the landing point for tariffs on EU goods will be materially below 30%. 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.' 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 of inflation by reducing demand for goods. Growth in the eurozone was relatively strong at 0.6% in the first quarter - though that was partly due 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, has attracted attention as a potential damper on growth and ECB Vice President Luis de Guindos said any rapid moves over $1.20 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.
Yahoo
34 minutes ago
- Yahoo
ECB expected to hold rates as more Trump tariffs loom
The European Central Bank looks set to keep interest rates unchanged on Thursday while the introduction of higher US tariffs threatened by US President Donald Trump hangs in the balance. A pause would bring an end to a string of cuts that dates back to September last year, as the ECB progressively lowered borrowing costs in response to sinking inflation. The pace of consumer price rises has settled around the central bank's two-percent target, having soared to double digit highs in the wake of the coronavirus pandemic and Russia's full scale invasion of Ukraine. But the relatively more favourable monetary policy conditions look fragile with an August 1 deadline for the possible imposition of punitive tariffs on European exports into the United States set by Trump. With Washington and Brussels still in talks over a possible tariff deal, ECB rate-setters would want "more clarity... before considering any further adjustment to monetary policy", UniCredit analysts said. A pause would give policymakers the summer to see whether Trump follows through with his threat to slap EU exports with a flat 30-percent tariff, in addition to existing levies on cars, steel and aluminium. Higher barriers to trade risk delivering a fresh blow to the eurozone economy, and encourage the ECB to contemplate further rate cuts. -'Powder dry'- After seven straight cuts and eight in total since June last year, the ECB has brought its benchmark deposit rate down to two percent from its peak of four percent in the midst of the inflation wave. "Neither the economic data nor latest data regarding price dynamics demand an immediate response from the ECB," according to Dirk Schumacher, chief economist at German public lender KfW. Eurozone inflation came in at exactly two percent in June and economic indicators including rising factory output have encouraged more optimism about the health of the economy. The ECB would also want to "keep some powder dry for the case of emergency" if Trump were to apply harsh tariffs, Berenberg analyst Felix Schmidt said. "A further escalation in the trade dispute would have a significant negative impact on the eurozone economy," leading to more rate cuts, Schmidt said. The increased strength of the euro against the dollar as a result of tariff uncertainty could also encourage policymakers to further soften the ECB's monetary policy stance. The euro has surged almost 14 percent against the dollar since the start of the year, boosted by investor moves to dump US assets in the face of Trump's impetuous policymaking and attacks on the US Federal Reserve. -Strong euro- A stronger euro would make imports cheaper and further suppress inflation. The ECB is already predicting the indicator to dip to 1.6 percent in 2026 before returning to target in 2027. Investors will be listening closely to ECB President Christine Lagarde's comments in Frankfurt at 2:45 pm (1245 GMT) for indications of what could come next. Lagarde dropped a strong hint that the ECB's cutting cycle was "getting to the end" at the last meeting in June, while stressing a data-dependent and meeting-by-meeting approach in the face of uncertainty. If an expected pause is confirmed Thursday, observers will turn their attention to how ECB thinking is developing ahead of its next gathering in September. "A relatively quiet July meeting could feature some heightened scrutiny on how comfortable policymakers would be with another euro rally," according to ING bank analyst Carsten Brzeski said. Worries over currency fluctuations "may not make their way to official communication, but could help tilt the balance to a more dovish overall tone," Brzeski said. "But with the many uncertainties, we doubt markets will get more clarity about the timing during this meeting." vbw/sea/sr/rl/tc Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
