Latest news with #Eurozone
Wall Street Journal
6 hours ago
- Business
- Wall Street Journal
Week Ahead for FX, Bonds: PMI Data, Middle East Conflict in Focus
Preliminary purchasing managers' surveys in the eurozone, U.K. and U.S. are among the biggest highlights in the week ahead. The surveys on manufacturing and services activity are an important indicator of economic growth. The data come amid concerns about President Trump's tariff policy and the Israel-Iran conflict. Noting that the global PMI data for May signaled some improvements in current and expected future output growth, S&P economists said in a note: 'With tensions rising in the Middle East, pushing oil prices sharply higher, the flash PMI data will be keenly assessed to see whether April really represented 'peak gloom' in terms of business confidence, or whether executives consider the economic and political environment to have deteriorated further.'
Wall Street Journal
11 hours ago
- Business
- Wall Street Journal
Kering Replaced by Rheinmetall in the Euro Stoxx 50 Index
Kering is being replaced by German arms maker Rheinmetall RHM 0.26%increase; green up pointing triangle in the Euro Stoxx 50 index, which provides a representation of sector leaders in the eurozone. The decision will be effective June 23, the index manager said. This is the first time Rheinmetall joins the index, it said, adding that Kering was added to the Euro Stoxx 50 index on September 24, 2018.
Yahoo
a day ago
- Business
- Yahoo
IMF chief: European lifestyle is at risk if productivity isn't boosted
Europe needs to boost its growth in the face of global headwinds or risk losing its way of life, said the head of the International Monetary Fund Kristalina Georgieva on Wednesday. 'I don't want Europe to become the United States of America, but I want the productivity and functionality of Europe to go up,' she told Euronews. 'In Europe we enjoy being a lifestyle superpower. Unless we become more productive we may lose this advantage,' she added. Georgieva was speaking ahead of the publication of a new IMF statement on Thursday, which offers economic suggestions to eurozone nations. One key message is that Europe must speed up progress on the single market, which ensures the free movement of goods, services, capital and people between single market nations. 'There are no tariffs within Europe, but it doesn't mean there are no barriers in Europe, regulatory and otherwise,' Georgieva told Euronews. The IMF estimates that barriers to free movement in the single market are equivalent to a 44% tariff on goods and a 110% tariff on services. Georgieva noted that in the US, what is produced in one state is split 30-70, meaning 30% is consumed in that state and 70% is sent to other states. In Europe, on the other hand, 70% of production is consumed domestically while 30% is sent abroad. This is a set-up that limits growth by keeping markets smaller and less competitive. 'If Europe completes the single market, over 10 years, it would boost GDP by 3%,' said Georgieva. Related US tariffs will not spark global recession but will weaken economy, IMF says EU budget needs 'a comprehensive overhaul' to handle shocks, says IMF Means to advance progress on this front include lowering regulatory fragmentation, supporting labour mobility, facilitating cross-border banking mergers, integrating the energy market, and making progress on the capital markets union (CMU) — said the IMF. The CMU aims to allow investment and savings to flow seamlessly across member states. This would make it easier for businesses in one EU state to source funding from another EU state, supporting firms to grow and create jobs. In terms of deepening capital markets, the IMF's statement added that the EU should 'increase institutional investors' familitary with venture capital as an asset class and address remaining undue restrictions on their ability to invest in it'. Looking ahead, the IMF expects eurozone growth at a moderate 0.8% in 2025, picking up to 1.2% in 2026. Trade and geopolitical tensions are expected to dampen sentiment and weigh on investment and consumption. With regards to interest rates, the IMF argued that 'a monetary policy stance close to neutral is justified' as headline inflation nears the ECB's 2% target. When balancing spending pressures with fiscal sustainability, the IMF recommended that countries with strong public finances support countries with less room for manoeuvre. 'It is crucial that care be taken in implementing the EU fiscal rules to ensure that countries with low fiscal risks that intend to increase spending to boost potential growth and enhance resilience should not be constrained from doing so by the rules,' said Thursday's statement. 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
Zawya
2 days ago
- Business
- Zawya
ECB to keep flexible approach as Israel-Iran war heightens risks, Panetta says
The European Central Bank will keep a flexible approach to monetary policy decisions against a backdrop where the conflict between Israel and Iran has compounded risks from Washington's trade policy, a top policymaker said on Wednesday. ECB Governing Council member Fabio Panetta, who heads Italy's central bank, said euro zone inflation was likely to remain below the 2% target for an extended period, against a "persistently weak" economy, based on current projections. Speaking on the sidelines of a separate event in Milan, fellow ECB policymaker and Bank of Portugal Governor Mario Centeno said the weakness of the euro zone economy was worrying and posed a threat to the ECB's inflation target. Data released on Wednesday by Eurostat confirmed that consumer prices rose 1.9% in May from a year ago. Panetta, at a Milan banking conference, pointed to "substantial and difficult-to-quantify risks" for the economic outlook stemming from the U.S. trade policy and the situation in the Middle East. "Against this backdrop, the ECB's Governing Council, at its most recent meeting, reaffirmed a flexible approach, keeping its options open," he said. "It will continue to take decisions on a meeting-by-meeting basis, without pre-committing to a defined course for monetary policy." The ECB signalled a pause in policy easing this month despite projections showing price growth dipping below its 2% target temporarily due to the strong euro and low oil prices, reviving worries that the ultra-low inflation environment of the pre-pandemic decade could return. "We are very worried about growth in Europe because it's not coming, and if it's not coming inflation won't be at 2%," Centeno told reporters. "We need a stronger economy to be compatible with 2% inflation, that's my main position," he said on the sidelines of the Young Factor conference in Milan.
Business Recorder
2 days ago
- Business
- Business Recorder
Euro zone bond yields steady before Fed, traders await new catalysts
LONDON: Euro zone bond yields held steady on Wednesday with traders awaiting the outcome of the Federal Reserve meeting later in the day for any hints about further rate cuts, and keeping a wary eye on developments in the Middle East. Germany's 10-year bond yield was down 1 basis point on the day at 2.52%, and its two-year yield was flat at 1.86%. Both were largely in the middle of their recent ranges. The big event for markets around the world on Wednesday is the Fed's rate decision, though the U.S. central bank is widely expected to leave its benchmark overnight interest rate in the 4.25%-4.50% range, where it has been since December. Traders' focus will be on whether it gives any clues as to whether and when it might begin cutting rates again, though it is also likely to repeat that it can't give much guidance until the impact of U.S. President Donald Trump's import tariffs and fiscal policies become clearer. Even an unlikely change in Fed messaging may do little to nudge European government bonds out of their recent rangebound trading, ING analysts said, as the economic effect of tariffs - inflationary in the U.S., disinflationary in Europe - means Fed and ECB policy is becoming more divergent. Markets are currently pricing one final 25 basis point ECB rate cut this cycle to take its terminal rate to 1.75%, expectations that have been fairly steady in recent weeks, contributing to rangebound trading in government bonds. Euro zone bond yields dip, traders eye Middle East tensions Michiel Tukker, senior rates strategist at ING, said there are two things that could change that. 'First is trade. July 9 is the date where we possibly have trade tariffs kick in if there isn't a trade deal. That'll start becoming a hot topic in the weeks before, and that's the period we're rolling into,' he said. 'Either negotiations turn sour, we go back to 1.5% (terminal rate), or things go quite well and he (Trump) softens his narrative and we maybe go closer to 2%, or at least stay near 1.75%, and the focus will shift back to German fiscal spending.' Germany is embarking on a massive ramp up of borrowing to fund increased spending on infrastructure and defence, likely leading to higher yields in the long term. The other factor in the near term, Tukker said, was economic data, though it would require multiple data points to detect a clear trend given the recent volatile trade policy - 'each data point can tell a different story depending on the sample month.' Investors will also be looking at Wednesday's releases of U.S. Treasury International Capital data that show overseas ownership of Treasuries. There was much speculation earlier this month that foreign investors were looking to reduce their ownership of U.S. government bonds due to erratic U.S. policy. Again, however, one data point will not be enough to provide a clear picture. Other bonds in Europe were largely moving in line with Germany's. Italy's 10-year bond yield, the benchmark for the euro zone periphery was flat at 3.51%.
