Latest news with #EuropeanCentralBank
Business Recorder
3 hours ago
- Business
- Business Recorder
European shares end May higher as trade uncertainty persists
FRANKFURT: European shares closed higher on Friday, rounding off the month with gains in a still uncertain trade environment as investors assessed the latest developments in US President Donald Trump's tariff plan. The continent-wide STOXX 600 index ended 0.1%higher, brushing off a temporary reinstatement of the most sweeping Trump's tariffs on Thursday, a day after another court ordered an immediate block on them. However, the benchmark index pared most gains after Trump said on Friday that China had violated an agreement on tariffs and issued a new threat to get tougher with Beijing, without revealing details. 'It is a whole different situation that we are going to be in... it's longer and slower and more complicated,' said Jochen Stanzl, chief market analyst at CMC Markets, pointing to the developments on the tariff front. The index still posted its first monthly advance in three, rising about 4%, while also ending the week higher, as investors capitalised on Trump's decision to postpone tariffs on the EU, opening the door for Brussels to produce a trade deal with Washington and recent US fiscal concerns that sent investors flocking to assets outside the US On the day, most sectors were higher, with utilities and healthcare shares up 0.8% each Construction and materials stocks were at the bottom, down 1%. 'This is very much driven by momentum and some fear of missing out... investors over the past few months have been trained to buy the dip to some extent,' said Stanzl. Europe's aerospace and defence index was the top winning sector for the month, up about 14%, as dimming hopes of a truce between Russia and Ukraine persuaded investors to buy ammunition stocks. Germany's DAX 40 ended 0.3% higher. Data showed German inflation eased further in May, bringing it closer to the European Central Bank's 2% target and bolstering the case for an interest rate cut next week. Another dataset showed German retail sales fell by 1.1% in April compared with the previous month. M&G gained 5.5% after it said Japanese life insurer Dai-Ichi Life Holdings will take a 15% stake in the British insurer and asset manager as part of a strategic deal.
Mint
12 hours ago
- Business
- Mint
Euro zone benchmark German 10-year bond yields hits three-week low to 2.4% amid Trump tariffs-led impact
Euro zone benchmark German bond yields were on track on Friday for their biggest weekly decline since mid-April as investors focused on the long-term adverse economic impact of U.S. trade policy. Germany's 10-year government bond yield was set for a 5-basis-point weekly drop, particularly after falling on Thursday on risks of extended policy and economic paralysis. On Friday, by 1457 GMT, it was up 1 bp to 2.52% after hitting a three-week low at 2.497% in earlier trade. A U.S. appeals court reinstated U.S. President Donald Trump's tariffs on Thursday, leaving Wall Street with no clear direction a day after most of the tariffs were blocked by a trade court. Markets were largely unmoved by German inflation data showing price growth easing further in May closer to the European Central Bank's 2% target, though it was higher than analysts expected. And euro zone bank lending continued to rebound last month, likely reflecting lower interest rates, separate data showed on Friday. Focus was also on data showing U.S. consumer spending increasing marginally in April while the Fed's favoured measure of underlying price pressures posted its smallest annual increase in four years. "U.S. data may play a more instrumental role for euro rates than domestic data, given that a hit to global risk sentiment can bull flatten the euro curve," said Michiel Tukker, senior European rates strategist at ING. "Yet with 10-year Bunds trading around the level of swaps, markets are already positioned for more headwinds and uncertainty ahead," he added. The gap between interest rate swaps and Bund yields was at minus 2.4 bps on Friday. It hit its all-time low at around -16 bps in early March. It was around 25 bps in October 2024, before a German political crisis. Markets price in more than a 90% chance of a 25 bps ECB rate cut next week. They also indicated a deposit facility rate at 1.70% in December, implying two rate cuts and just under a 20% chance of a third easing move by then. The ECB will almost certainly cut interest rates on June 5, with a more than 70% majority of economists polled by Reuters expecting policymakers to pause for the first time in a year in July despite a weak economy at risk from the U.S.-led trade war. Italy's 10-year yield was last up 2 bps to 3.52%, after dropping to 3.488%, its lowest level in nearly 3 months. It was on track for a weekly drop of 11 bps, the most since mid-April. The gap between Italian and German yields was at 97 bps after reaching 89.8 bps on Thursday, its lowest since February 2021.
Wall Street Journal
12 hours ago
- Business
- Wall Street Journal
Week Ahead for FX, Bonds: U.S. Jobs Data, Likely ECB Rate Cut in Focus
U.S. jobs data for May will be the focus of the week ahead as investors look to see the extent to which tariffs are affecting jobs and what that might mean for interest rates, alongside ISM data on U.S. manufacturing and services sector activity. A decision by the European Central Bank will also be closely watched, where a rate cut is widely expected. The Bank of Canada also announces its latest policy decision and is expected to leave rates unchanged.
Yahoo
13 hours ago
- Business
- Yahoo
German markets steady as investors await inflation data
Investors on the German stock market remained cautious on Friday, as they awaited inflation figures from Germany and developments surrounding the US tariff policy. A public holiday in Germany the previous day is likely to slow trading, with many investors enjoying a long weekend. The leading German stock exchange index, the DAX, climbed 0.19% to 23,978.18 points shortly after the start of trading on Friday. The second-tier MDAX of medium-sized companies remained virtually unchanged at 30,698.45 points. The eurozone's leading index, the EURO STOXX 50, fell slightly. This followed the DAX's previous record run to almost 24,326 points in the middle of the week, after which some investors cashed in during thin holiday trading on Thursday. Observers are now focusing on economic data, with experts awaiting the May inflation figures from Germany's Federal Statistical Office at 2 pm (1200 GMT). "This information is important in view of next week's ECB [European Central Bank] Governing Council meeting," experts from the Landesbank Helaba said in their morning commentary. The ECB is set to make a decision on interest rates at the meeting on Thursday. Price data from the United States will also be released shortly after the German inflation figures. Court rulings on the US government's tariff policy have muddied the situation on the financial markets, according to the Helaba experts. "A large proportion of the tariffs have been declared invalid and blocked, but an appeals court has now reinstated the easures, for the time being. The situation remains tense," they said. Investors on Wall Street, however, were largely unfazed by the legal wrangling. 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
Yahoo
13 hours ago
- Business
- Yahoo
Eurozone disinflation on track as price pressures ease in Germany, Italy and Spain
Consumer price growth in Germany held steady in May, while inflation eased in Spain and Italy, reinforcing expectations of a broader disinflation trend across the eurozone. The preliminary figures released by Germany's Federal Statistical Office on Friday show that annual inflation in the eurozone's largest economy held steady at 2.1% in May 2025. The reading came in slightly below analysts' expectations of 2.2%. On a monthly basis, German consumer prices rose by just 0.1%, a sharp slowdown from April's 0.4% increase and the weakest gain since January. Core inflation, which strips out food and energy, is estimated to have risen by 2.8% year-on-year, indicating that underlying inflationary pressures remain more resilient. Disinflation trends are also visible across Southern Europe. In Spain, preliminary data show the annual consumer price index fell to 1.9% in May, down from 2.2% in April and under the 2.1% anticipated by markets. The deceleration was largely driven by lower prices in leisure and cultural services, as well as more modest increases in electricity and transport costs compared to the same period in 2024. Spanish core inflation also edged down by 0.3 percentage points, settling at 2.1%. Italy recorded an annual inflation rate of 1.7% in May, slipping from 1.9% in April and in line with consensus forecasts. The latest national readings reinforce expectations that euro area headline inflation will ease further when the aggregate May data are published next week. Median economist forecasts point to a decline from 2.2% in April to 2.1% in May. Goldman Sachs on Friday lowered its forecast for eurozone inflation to 1.95% year-on-year, down from a prior estimate of 1.99%. The bank also revised its core inflation forecast downward by seven basis points, to 2.37%, citing subdued underlying pressures in Germany. With inflation across the bloc moving further closer to the European Central Bank's 2% target, the data add weight to expectations that the ECB may continue to ease interest rates at its next week meeting. The euro traded flat at 1.1335 against the dollar after Germany's inflation print, though it remained 0.3% down on the day. European government bond yields were little changed, with the German 10-year Bund yield steady at 2.53%. Equity markets showed mixed performance. The Euro STOXX 50 index dipped 0.4% by mid-afternoon, on track for a broadly unchanged week. Germany's DAX, however, gained 0.2%, climbing back above the 24,000 mark. In other news, oil prices fell sharply amid speculation that OPEC+ could increase production by more than 411,000 barrels per day in July. WTI crude futures dropped over 1.5% to $60.2 (€55.3) per barrel, while Brent slid below $63 (€57.9). Meanwhile, geopolitical risks resurfaced after US President Donald Trump accused China of violating the bilateral trade agreement, reigniting concerns over potential tariff escalations. Error in retrieving data Sign in to access your portfolio Error in retrieving data
