Speaking on Saturday, Dutch ECB Governing Council member Klass Knot acknowledged the market’s heightened expectations for ECB rate cuts, noting that this shift occurred after disappointing PMIs and consumption data. Knot described these expectations as having increased “quite dramatically” but cautioned that the market may have been “a little bit over-enthusiastic.” He highlighted that “We…
Dollar emerged as the unequivocal winner in the currency markets last week. Both Dollar Index and 10-year US Treasury Yield surged through their respect technically significant 55 W EMA resistance. It remains to be seen whether traders are positioning ahead of the US presidential election results, which are less than two weeks away. However, the…
At an event today, ECB President Christine Lagarde expressed contentment with the current inflation levels, stating that the central bank is “rather satisfied” as inflation has slowed to below the 2% target. However, she emphasized that the central bank is keeping a close watch on economic growth, as it significantly influences inflationary trends. Lagarde pointed…
At a Bloomberg Newsmaker event, ECB President Christine Lagarde expressed that she was “absolutely confident” that inflation would sustainably return to 2% by 2025. When asked if this target could be reached earlier than ECB’s current projection of late 2025, Lagarde replied, “That would be my hope.” Despite this optimism, Lagarde emphasized the need for…
Dollar continued its reign as the strongest currency for yet another week, bolstered by solidifying expectations around gradual and measured rate cut cycle by Fed. The rate cut from ECB provided some additional tailwind for the greenback. However, momentum behind the Dollar’s rise remains tepid. Strong risk-on sentiment, coupled with sluggishness in U.S. Treasury yields,…
The European Central Bank (ECB) lowered its interest rates by 25bp yesterday, in a widely expected and priced in move. Chief Christine Lagarde highlighted that inflation is coming under control, warned that there could be a temporary uptick, but the figures will be sustainably back to target by next year and that the Eurozone will…
Today, the ECB cut rates for the third time this year, bringing the deposit rate to 3.25% in line with expectations. The weakness in the incoming economic data since the last GC meeting was acknowledged by Lagarde, and that data has led to further confidence the inflation path is on track, leading to the rate…
Now that central banks are cutting rates, the question of where they will stop comes into focus. Real rates have trended down for decades, but a very long-term view supports our thesis that rates will average higher in future than they did pre-pandemic. Most peer central banks are already cutting rates and some are front…
ECB Governing Council member Peter Kazimir struck a cautious tone today, signaling that while a rate cut next week is possible, he remains “not completely convinced” that ECB should move based on just one positive inflation reading. Speaking to reporters, Kazimir acknowledged that September’s CPI dip below 2% for the first time since 2021 has…
Eurozone retail sales volume rose 0.2% mom in August, matched expectations. The increase was driven by a 0.2% rise in food, drinks, and tobacco sales, a 0.3% boost in non-food products (excluding automotive fuel), and a 1.1% jump in sales of automotive fuel from specialised stores. In the wider EU, retail sales grew by 0.3%…