Latest news with #EuroArea
RTÉ News
7 hours ago
- Business
- RTÉ News
Breaking ECB cuts interest rates for eighth time in a year
The ECB has cut interest rates for the eighth time in a year by one-quarter of a percentage point, which brings its rate down from 2.25% to 2% The move will immediately benefit tracker mortgage customers and put downward pressure on other rates. With inflation now safely in line with its 2% target, today's decision is uncontroversial, shifting the focus to what signals ECB President Christine Lagarde might send about policy ahead. Some investors are already pricing in a pause in July, and some conservative policymakers have also advocated a break to give the ECB a chance to reassess how exceptional uncertainty and policy upheaval both at home and abroad will shift the outlook. The ECB's latest macroeconomic projections signal weaker economic growth in 2026 and softer inflation outlook for both 2025 and 2026, according to Davy. "These projections represent a downward revision from the estimates published in March," said Stephen Grissing, Director and Investment Strategist with Davy Private Clients. "The Euro Area economy remains exposed to elevated risks as trade tariff negotiations with the United States continue. The heightened uncertainty surrounding these talks threatens to disrupt cross-border trade and potentially undermining business confidence in the region. "The downward revisions to both growth and inflation projections increase the likelihood of further monetary easing by the European Central Bank. "Futures pricing indicates an additional one to two further rate cuts by the end of the year, which would bring the deposit facility rate to 1.75% or 1.5%. Mr Grissing added that lower interest rates will be welcomed by homeowners, farmers and companies as they continue to benefit from lower borrowing costs.
Bloomberg
2 days ago
- Business
- Bloomberg
European Stocks Tick Higher on Easing Inflation; Miners Decline
European stocks edged higher as euro-area inflation eased more than expected, bolstering the case for further interest-rate cuts. Miners dropped after glum China economic data. The Stoxx 600 Index closed up 0.1%, erasing a decline of as much as 0.5%. That's as US equities shrugged off earlier concerns after the OECD warned that President Donald Trump's trade policies have tipped the world economy into a downturn. Jobs data showed the US labor market is holding up.
Irish Times
2 days ago
- Business
- Irish Times
Euro-zone inflation slows below 2%, backing more ECB cuts
Euro-area inflation eased more than expected, dipping below the European Central Bank's 2 per cent target and supporting the case for interest rates to be lowered further. Consumer prices rose 1.9 per cent from a year ago in May, down from 2.2 per cent in April and below the 2 per cent median estimate in a Bloomberg survey of economists, data Tuesday showed. A core gauge excluding volatile items like food and energy moderated to 2.3 per cent, while pressures in the closely watched services sector cooled markedly. It's the first time in eight months and only the second since mid-2021 that headline inflation hasn't exceeded the target. Following Russia's invasion of Ukraine and the subsequent energy crisis, it reached a record 10.6 per cent in October 2022. The numbers arrive on the eve of the ECB's two-day rate meeting. With inflation in check and trade tensions between President Donald Trump and Europe clouding the economic outlook, another quarter-point cut in the deposit rate, to 2 per cent, is almost fully priced. READ MORE 'Despite the favourable optics, much of the decline might simply reflect a reversal of temporary pressures April, when the timing of Easter drove up tourism-related costs,' Bloomberg economist Simona Delle Chiaie said. 'Still, several factors – including the lingering effects of US tariffs – suggest further price moderation lies ahead. We expect the ECB to cut rates this week, with a follow-up move likely in September.' That could be the last easy decision for the Governing Council, however, as policymakers dispute where prices will head next – not just due to tariffs, but also the upcoming jump in European defence and infrastructure outlays. Investors reckon there'll be one more cut this year beyond June. In the short term, much hinges on trade. Most goods from the European Union are currently subject to a 10 per cent US levy, but that could jump to 50 per cent next month. Brussels has warned it may speed up retaliatory measures if Trump follows through on his tariff threats – the latest of which includes a 50 per cent levy on steel and aluminium imports. The topic will certainly be on the agenda when German Chancellor Friedrich Merz meets Trump in Washington on Thursday. Due to the uncertainty over how the trade situation will evolve, the ECB will provide scenarios alongside its quarterly projections that day. In March, it saw inflation slowing to 1.9 per cent in 2026 and 2 per cent and 2027, from 2.3 per cent this year. The euro's surprise advance and softer energy costs have since reinforced the retreat. Some policymakers have suggested there'll be a downward revision to the projection – feeding a debate over the risk of undershooting 2 per cent. Lithuania's Gediminas Simkus said last week that there's a growing danger of inflation falling short of that goal. Recent data on workers' pay have added to such concerns. The ECB's wage tracker signals a sharp slowdown in 2025 to levels below what's deemed compatible with 2 per cent inflation. That's despite unemployment holding at a record-low 6.2 per cent in April. At the same time, consumers' expectations for price growth over the next year have ticked up to 3.1 per cent – the highest since February 2024. – Bloomberg
Bloomberg
2 days ago
- Business
- Bloomberg
Euro-Zone Inflation Slows Below 2%, Backing More ECB Rate Cuts
Euro-area inflation eased more than expected, dipping below the European Central Bank's 2% target and supporting the case for interest rates to be lowered further. Consumer prices rose 1.9% from a year ago in May, down from 2.2% in April and below the 2% median estimate in a Bloomberg survey of economists, data Tuesday showed. A core gauge excluding volatile items like food and energy moderated to 2.3%, while pressures in the closely watched services sector cooled markedly.
Bloomberg
3 days ago
- Business
- Bloomberg
Rheinmetall to Replace Kering in Euro Stoxx 50, JPMorgan Says
Rheinmetall AG 's surging stock price has earned the tank and munitions maker a place in the euro area's main stock benchmark. The German company will replace Gucci owner Kering SA in the Euro Stoxx 50 benchmark as of June 20, JPMorgan Chase & Co strategist Pankaj Gupta wrote in a note, citing index compiler Stoxx Ltd. It will be the only pure-play defense name in the gauge, which counts Safran SA and Airbus SE among its members. Bloomberg News has reached out to Stoxx by phone and email for comment.
