Latest news with #Kazaks
Bloomberg
25-07-2025
- Business
- Bloomberg
ECB's Kazaks Sees Little Need for Further Rate Cuts
Good morning. A European central banker sees little need for further easing. A $50,000-a-night resort showcases Africa's luxury travel boom. And the Underground is broiling City commuters. Listen to the day's top stories. There's little reason for the European Central Bank to lower interest rates further unless the economy suffers a major blow, according to Governing Council member Martins Kazaks. With inflation at 2% and the euro zone largely performing in line with the ECB's latest forecasts, the grounds for a cut in September aren't obvious, the Latvian central-bank chief said in an interview. ' There is value in holding rates at the current levels and the time of no-brainer moves to hike or cut is over,' Kazaks said.
Reuters
01-07-2025
- Business
- Reuters
ECB's Kazaks sets 10% pain threshold for tariffs and the euro
SINTRA, Portugal, June 30 (Reuters) - A 10% U.S. tariff on European goods, combined with a similar or greater appreciation of the euro against the dollar, would significantly impact euro zone exports, European Central Bank policymaker Martins Kazaks said on Monday. As trade negotiations between the U.S. and the EU remain uncertain, economists are speculating about the conditions that might prompt the ECB to intervene with further interest rate cuts to support the euro zone economy. Kazaks said euro zone imports would already be affected by a 10% U.S. duty - the baseline to which EU officials have resigned themselves - and a 10% or greater rise in the euro's exchange rate against the dollar, which would be just 1% more than what it has gained since Liberation Day. Higher tariffs abroad and a stronger currency make a region's exports more expensive. "If there is a 10% tariff plus a 10%-plus euro appreciation of the exchange rate, this is large enough to affect export dynamics," he told Reuters at the ECB's annual forum on Central Banking in Sintra, Portugal. The euro was trading at $1.178 on Tuesday, up 13.8% since the start of the year and 8.9% since the beginning of April. Kazaks described the euro zone economy as "weak", although still showing "some growth", adding that inflation was "more or less" at the central bank's 2% target, implying little need for major policy changes. The ECB's latest baseline projection showed inflation at the ECB's 2.0% target this year, before dipping to 1.6% the next and returning to 2.0% in 2027. "The majority of the rate adjustment has been done," Kazaks said, repeating his previous position. "If there are further cuts, they will be small and have signalling value, provided that we remain in the baseline." He also warned that China "was starting to dump goods on Europe", which would both push down inflation and undermine European competitiveness.
Globe and Mail
22-05-2025
- Business
- Globe and Mail
US Deficit Concerns Undercut the Dollar and Boost Gold
The dollar index (DXY00) Wednesday fell by -0.59% and posted a 2-week low. The dollar remains under pressure after Moody's Ratings late last Friday downgraded the US government's credit rating from Aaa to Aa1, citing a ballooning budget deficit and fiscal concerns. The downgrade puts the dollar's status as a global reserve currency into question and may prompt some investors to lighten up on their dollar assets. Also, worries about rising US budget deficits are undercutting the dollar, with legislators discussing a tax-cut package. Higher T-note yields on Wednesday limited losses in the dollar. The markets are discounting the chances at 5% for a -25 bp rate cut after the June 17-18 FOMC meeting. EUR/USD (^EURUSD) Wednesday rose by +0.41% and posted a 2-week high. Wednesday's dollar weakness supported gains in the euro. The euro also moved higher on Wednesday due to hawkish comments from ECB Governing Council member Kazaks, who said ECB interest rate cuts are nearing an end. The ECB, in its bi-annual Financial Stability Review, said the 'atypical shifts' away from traditional havens like the dollar and US Treasuries after April's trade announcements may point to a 'fundamental regime change.' That raises the danger of 'broader shifts in capital flows that could have potentially far-reaching consequences for the global financial system.' ECB Governing Council member Kazaks said ECB interest rate cuts are nearing an end, assuming the base case for inflation stabilizing at 2% over the coming months is realized. Swaps are discounting the chances at 93% for a -25 bp rate cut by the ECB at the June 5 policy meeting. USD/JPY (^USDJPY) Wednesday fell by -0.61%. The yen on Wednesday added to this week's rally and posted a 2-week high against the dollar. The yen found support Wednesday from rising Japanese government bond yields after the 10-year JGB bond yield jumped to a 1-3/4 month high of 1.539%. Also, the escalation of geopolitical risks has boosted safe-haven demand for the yen after CNN reported that new US intelligence suggests Israel is preparing for a potential strike on Iranian nuclear facilities. Higher T-note yields on Wednesday limited gains in the yen. Japanese trade news was mixed. Apr exports rose +2.0% y/y, weaker than expectations of +2.5% y/y. Apr imports fell -2.2% y/y, a smaller decline than expectations of -4.2% y/y. June gold (GCM2 5) Wednesday closed up +28.90 (+0.88%), and July silver (SIN2 5) closed up +0.472 (+1.42%). Precious metals on Wednesday settled higher, with gold climbing a 1-1/2 week high and silver posting a 3-week high. Wednesday's fall in the dollar to a 2-week low supports precious metals. Also, escalating geopolitical risks are ramping up safe-haven demand for precious metals after CNN reported that Israel may be planning a strike on Itan's nuclear facilities. In addition, worries about rising US deficits are boosting precious metals as a store of value, with US legislators discussing a tax-cut package. Finally, geopolitical risks in the Middle East continue to support safe-haven demand for precious metals. Israeli Prime Minister Netanyahu announced an 'unprecedented attack' on Hamas and said Israel would take over the entire Gaza Strip. Also, Israel's airstrikes on Houthi rebels in Yemen continue. Higher global bond yields on Wednesday were bearish for precious metals. Also, hawkish comments on Wednesday from ECB Governing Council member Kazaks were bearish for precious metals when he said ECB interest rate cuts are nearing an end. Fund liquidation of long gold positions continues to weigh on prices due to the easing of US-China trade tensions after China and the US recently agreed to reduce tariffs on each other's goods. Long gold positions in ETFs fell to a 6-week low on Tuesday.
Bloomberg
21-04-2025
- Business
- Bloomberg
ECB's Kazaks Warns Tariffs Raise Risk of Euro-Area Recession
European Central Bank Governing Council member Martins Kazaks said that tariffs announced by the US were stoking uncertainty and raising the risk of an economic recession in the euro area. 'Recession is not currently the base scenario, but with potentially such large-scale changes in geopolitics and global trade, its probability is high,' Kazaks, who is also governor of the Latvian central bank, said in a blog on Monday.
Reuters
27-03-2025
- Business
- Reuters
ECB's Kazaks expects more rate cuts if current economic trajectory holds, Bloomberg News reports
March 27 (Reuters) - The European Central Bank could lower borrowing costs further if the current economic trajectory is maintained, Governing Council member Martins Kazaks told Bloomberg News in an interview on Thursday. Kazaks, who is also the Latvian central bank governor, told Bloomberg News tariffs are another source of uncertainty.
