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RTÉ News
4 days ago
- Business
- RTÉ News
For markets, end to ECB rate cuts just got closer
Traders are increasingly confident the European Central Bank will pause its run of interest rate cuts now that the central bank sees itself as well-positioned to deal with global economic uncertainty fuelled by US tariff policy. Following Thursday's quarter-point cut in rates to 2%, ECB chief Christine Lagarde said the central bank was in a "good place" and was getting to the end of the monetary policy cycle. That lit a fuse under markets: The euro rose to six-week highs against the dollar and rate-sensitive short-dated euro zone government bond yields jumped as investors trimmed their rate cut bets. Money markets now price in a roughly 20% chance of a July cut compared with almost 30% just before Lagarde started speaking, with market attention initially falling on downward revisions to the ECB's latest inflation forecasts. While traders still anticipate one more cut this year given US tariff uncertainty, the bigger picture is that the ECB's most aggressive easing cycle since the 2008/2009 global financial crisis was nearing an end, analysts said. "The phrase that turned markets was that the ECB is in a good place to navigate the uncertainties," said Aviva Investors senior economist Vasileios Gkionakis. "Absent a major shock on tariffs or an external shock, the most likely outcome is that the ECB is done." The euro rose more than 0.5% to $1.1481, while two-year German government bond yields rose 8 basis points to around 1.88% in their biggest one-day jump in more than three weeks . "The strength of the euro is coming from the ECB's surprisingly hawkish message that they are approaching the end of the cutting cycle with today's rate cut," said Commerzbank currency strategist Michael Pfister. Becky Qin, multi-asset portfolio manager at Fidelity International, said she took a positive view on the euro given expectations for European investors to bring money back home from the United States. The euro's trade-weighted exchange rate is up almost 4% so far this year while oil prices are down 13% , putting downward pressure on inflation. Data on Tuesday showed inflation slowed to 1.9% in May from 2.2% a month earlier. A cut in the ECB's inflation projections initially caught market attention, but that was quickly overshadowed by Lagarde's comments. "The language was tilted to a pause being the base case," said Gareth Hill, portfolio manager at Royal London Asset Management. "The objective for this meeting was to get the market prepared for rates staying near where they are right now in case something left-field comes." Inflation could dip in the short term - possibly even below the ECB's target - but increased government spending, including German fiscal stimulus and higher trade barriers, may add to price pressures later. Lagarde said policymakers were "virtually unanimous" on the rate cut. "Despite the downward revision on growth and inflation since the last forecast, given the uncertainty about trade negotiations for the ECB to be data-dependent is the right assessment," Fidelity's Qin said. "'Wait-and-see or pause' is probably the fair assessment for the next meeting." Europe's broad stock index trimmed its falls following the ECB decision Banking stocks rallied and their outperformance was another sign that investors were sensing an end to further rate reductions. ELEPHANT, ROOM Analysts said that US tariff policy remained the biggest challenge to the ECB outlook. US President Donald Trump last month backed away from his threat to impose 50% tariffs on imports from the European Union, restoring a July 9 deadline to allow for talks between Washington and the 27-nation bloc to produce a deal. "It's 3-4 months since Trump's inauguration and the world has changed and turned upside down, so forecasting with certainty what will happen in the next few months would be challenging," said RLAM's Hill. The ECB expects the economy to grow 0.9% this year and trimmed 2026 forecasts to 1.1%. Aviva's Gkionakis noted the euro zone economy was holding up better than anticipated at the start of the year, with the composite PMI -- a closely watched gauge of business activity -- holding around the 50 mark that divides contraction from expansion. "My view is that the ECB should stay at 2%," he added.
Reuters
5 days ago
- Business
- Reuters
For markets, end to ECB rate cuts just got closer
LONDON, June 5 (Reuters) - Traders are increasingly confident the European Central Bank will pause its run of interest rate cuts now that the central bank sees itself as well-positioned to deal with global economic uncertainty fuelled by U.S. tariff policy. Following Thursday's quarter-point cut in rates to 2%, ECB chief Christine Lagarde said the central bank was in a "good place" and was getting to the end of the monetary policy cycle. That lit a fuse under markets: The euro rose to six-week highs against the dollar and rate-sensitive short-dated euro zone government bond yields jumped as investors trimmed their rate cut bets. Money markets now price in a roughly 20% chance of a July cut compared with almost 30% just before Lagarde started speaking, with market attention initially falling on downward revisions to the ECB's latest inflation forecasts. While traders still anticipate one more cut this year given U.S. tariff uncertainty, the bigger picture is that the ECB's most aggressive easing cycle since the 2008/2009 global financial crisis was nearing an end, analysts said. "The phrase that turned markets was that the ECB is in a good place to navigate the uncertainties," said Aviva Investors senior economist Vasileios Gkionakis. "Absent a major shock on tariffs or an external shock, the most likely outcome is that the ECB is done." The euro rose more than 0.5% to $1.1481 , while two-year German government bond yields rose 8 basis points to around 1.88% in their biggest one-day jump in more than three weeks . "The strength of the euro is coming from the ECB's surprisingly hawkish message that they are approaching the end of the cutting cycle with today's rate cut," said Commerzbank currency strategist Michael Pfister. Becky Qin, multi-asset portfolio manager at Fidelity International, said she took a positive view on the euro given expectations for European investors to bring money back home from the United States. The euro's trade-weighted exchange rate is up almost 4% so far this year while oil prices are down 13% , putting downward pressure on inflation. Data on Tuesday showed inflation slowed to 1.9% in May from 2.2% a month earlier. A cut in the ECB's inflation projections initially caught market attention, but that was quickly overshadowed by Lagarde's comments. "The language was tilted to a pause being the base case," said Gareth Hill, portfolio manager at Royal London Asset Management. "The objective for this meeting was to get the market prepared for rates staying near where they are right now in case something left-field comes." Inflation could dip in the short term - possibly even below the ECB's target - but increased government spending, including German fiscal stimulus and higher trade barriers, may add to price pressures later. Lagarde said policymakers were "virtually unanimous" on the rate cut. "Despite the downward revision on growth and inflation since the last forecast, given the uncertainty about trade negotiations for the ECB to be data-dependent is the right assessment," Fidelity's Qin said. "'Wait-and-see or pause' is probably the fair assessment for the next meeting." Europe's broad stock index trimmed its falls following the ECB decision (.STOXX), opens new tab. Banking stocks rallied and their outperformance was another sign that investors were sensing an end to further rate reductions (.SX7P), opens new tab. Analysts said that U.S. tariff policy remained the biggest challenge to the ECB outlook. U.S. President Donald Trump last month backed away from his threat to impose 50% tariffs on imports from the European Union, restoring a July 9 deadline to allow for talks between Washington and the 27-nation bloc to produce a deal. "It's 3-4 months since Trump's inauguration and the world has changed and turned upside down, so forecasting with certainty what will happen in the next few months would be challenging," said RLAM's Hill. The ECB expects the economy to grow 0.9% this year and trimmed 2026 forecasts to 1.1%. Aviva's Gkionakis noted the euro zone economy was holding up better than anticipated at the start of the year, with the composite PMI -- a closely watched gauge of business activity -- holding around the 50 mark that divides contraction from expansion. "My view is that the ECB should stay at 2%," he added.
Bloomberg
15-05-2025
- Business
- Bloomberg
Aviva's Wealth Unit Sees £2.3 Billion Inflows as Assets Rise 5%
UK insurer Aviva Plc said its wealth unit saw net inflows in the first quarter, with assets under management in the business rising by 5%. The arm attracted a net £2.3 billion ($3.1 billion), while the firm's asset management business, Aviva Investors, recorded net outflows of £906 million in the three months through March, according to a trading update on Thursday. General insurance premiums increased 9%.
Daily Mail
07-05-2025
- Business
- Daily Mail
Plans to build plush 34-storey office block to stand out against London skyline with distinctive feature
A new 34-storey skyscraper with a distinctive 'crown' design at the top of its 479ft structure is being planned for the City of London. The proposed glass and steel structure at 130 Fenchurch Street will feature 31 storeys of office space as well as public viewing galleries and exhibition spaces halfway up. The new building will replace Fountain House, the existing 16-storey block which was built on a Second World War bomb site and is now set to be demolished. Fountain House, which was one of the first tall buildings to go up in the City following the Blitz, was completed in 1958 but has been mostly empty since 2020. The postwar building is notable for being the capital's first New York style 'podium and tower' development which later became the norm for office blocks in London. The new building designed by architects Eyre Wilkinson comes after refurbishment of the existing structure was considered as an option but eventually rejected. It will have 600,000 sq ft of office space, in a boost to the City of London Corporation as it tries to accelerate development given demand is currently higher than supply. The building is next door to Fen Court at 120 Fenchurch Street which is known for its 'Garden at 120' rooftop garden – not to be confused with the nearby Sky Garden. Aviva Investors is backing the scheme and wants to add nearly 4,000 sq ft of 'retail and hospitality facilities' plus pedestrian access from Cullum Street to Fen Court. The building will be the 12th tallest in the City, although it could move down the list before it opens as other skyscrapers are completed, reported The Standard. A temporary exhibition space called Seed130 showcasing work by poets, writers and scientists is already on site and will stay open while the plans progress. The application is expected to be considered by the Corporation's planning sub-committee later this year and demolition will begin early next year if it is passed. Ben Littman, head of development in real Estate at Aviva Investors, said: 'These proposals aim to deliver a showpiece tower in the Square Mile which can support the City of London's ambitious City Plan 2040, creating a truly flagship location with the potential to attract world-leading businesses. 'We believe our plans will provide a dynamic building which complements the surrounding area, whilst creating a scheme that helps the City get ready for the future by incorporating modern technologies and targeting best-in-class standards of energy efficiency.' Aviva Investors, an investment management company which is part of the Aviva group, is also behind the One Liverpool Street and 101 Moorgate developments. Stephen Black, director at CO-RE, which is developing the site, added: '130 Fenchurch Street has been expertly designed by Wilkinson Eyre to delicately align with the existing and evolving Eastern cluster, enrich the public realm and connect the site to the Fenchurch Street area. 'Partnering with Aviva Investors, we are bringing forward a sustainable scheme that offers world-class space to meet the needs of the Square Mile whilst putting the wellbeing of tenants first.'
The Guardian
23-03-2025
- Business
- The Guardian
It's AGM time, season of free sandwiches and protest fireworks
The leafy surroundings of Sunbury-on-Thames in Surrey will provide an unlikely backdrop for potentially one of the most explosive events of an intriguing shareholder meeting season, as corporate Britain grapples with a rapidly shifting geopolitical backdrop. Next month, BP will host its annual general meeting (AGM) outside London for a second consecutive year, a move that last year failed to deter the climate protesters who have frequently disrupted oil companies' meetings. The company is in the crosshairs over the U-turn it has made on its green ambitions, while investing $10bn a year in new oil and gas projects – and will also be coming under fire from angry shareholders over its poor share performance. There could also be a showdown between the board and the activist investor Elliott, a New York hedge fund, in what could be the last meeting presided over by under-pressure chair Helge Lund. Many major listed UK companies hold their AGMs between April and May. The meetings offer a rare opportunity for investors who own just a few shares – as well as large financial institutions – to take multimillionaire executives to task over issues big and small before they head for the free sandwiches. The return of Donald Trump to the White House has changed the picture significantly since last year's AGM season. Trump has swiftly embarked on an anti-diversity push and his 'drill baby, drill' agenda to keep the US, and the world, hooked on oil and gas, so bosses can expect questions about companies' rollback on diversity, equity and inclusion (DEI) targets and watering-down of climate goals. But some large investors are already easing their climate stance. Aviva Investors – the investment arm of Britain's biggest insurer – last week in effect ditched its 2021 plan to sell stakes in companies that fail to restrict their carbon emissions and meet climate targets. In January, BlackRock, the world's largest fund manager, became the latest financial firm to quit a major climate change industry group, after coming under attack from US conservative politicians. 'The 2025 AGM season is set to be a tough one for responsible investors,' said Paul Hunter, chief executive of the shareholder advisory group Pirc. 'Recent years have seen a concerted effort to roll back progress that has been made to reduce environmental, social and governance (ESG) risks. This has been spurred by politicised debate about ESG in the US and what we see as a misguided approach to seeking growth.' At BP, some investors have voiced concerns that it has decided not to put its climate plans to a vote, while rival Shell will be quizzed by shareholders including the Greater Manchester and Merseyside local government pension funds on its plans to increase sales of liquefied natural gas and how its growth strategy is compatible with its climate goals. HSBC has also drawn criticism from environmental campaigners after postponing key parts of its climate goals by 20 years, while watering down green targets in a new long-term bonus plan for its chief executive, Georges Elhedery, worth up to £9m. UK-listed companies may also face some heat as they are expected to step away from explicit DEI targets, and to remove diversity initiatives as criteria for executive pay. Trump's anti-DEI executive order means those with ties to the US have been caught between UK and US standards. The pharma company GSK is likely to face questions at its AGM – at a five-star London hotel in May – over its recent decision to pause diversity activities. It has argued that it had to comply with Trump's executive orders because the US is the company's biggest market. Boardroom pay will be in the spotlight as usual during AGM season, after several companies announced huge potential pay packets for their bosses in recent weeks, arguing they need to stay competitive with US rivals to attract, and hang on to, top executives. There have been sizeable shareholder rebellions over executive pay in the past – for example, against Britain's best-paid boss of a listed company, Pascal Soriot, who runs the drugmaker AstraZeneca. His annual pay could go up from £14.7m last year to as much as £25m. Governance experts Institutional Shareholder Services say questions may be asked about whether the company, after 'significant dissent to remuneration proposals at the last AGM', has 'sufficiently assuaged shareholder concerns raised regarding variable pay'. Astra is among the companies holding its AGM, which is on 11 April, virtually. Since the pandemic, some companies have hosted hybrid meetings – in person and streamed online. While many companies in North America have virtual-only meetings, it is more unusual for large UK corporates to do so. And for the sake of spectacle, traditional AGMs remain far more compelling.
