Ivelin Stankov’s Post

Today in financial markets 1.2995 £/$ 1.1890 £/Euro 1.9290 £/Aud 1.7775 £/Cad 9.45 £/RMB All Eyes on the ECB Today's focus will be on the European Central Bank as they conduct another monetary policy announcement following their June interest rate cut. This meeting is not set to produce another rate cut, instead Christine Lagarde will use the appearance to express the ECB's requirement to continue monitoring the situation across the euro area. The pound is trading around the €1.19 level as we enter today's session. This comes after UK June inflation data was released a little hotter than forecast yesterday. This keeps pressure on the BoE who are yet to provide a concrete indication of the month where they will commence reducing rates. Also on today's agenda, US jobless claims, US regional manufacturing gauges, and Fed speakers. It should be a lively day of trade with particular focus on the single currency. Can GBPEUR test the €1.20 level?!

📭 Markets await ECB rate cut Todays most crucial economic event is the European Central Bank monetary policy announcement, which will be closely monitored by investors. Markets are expecting the ECB cut interest rates before the Federal Reserve and the Bank of England, investors have priced in a 25-basis point cut to reduce the headline rate to 4.25 percent. ECB President Lagarde’s speech will be carefully watched to see her outlook on when the next rate cut will be, however future wage data and inflation figures could shift her decision. Elsewhere in the European Union, the change in the value of all goods sold is expected to fall -0.3 percent in April. This forecast further supports the ECB’s decision to reduce rates. GBPEUR has been fairly flat in the build up to the ECB interest rate decision today. This week Pound to Euro has been trading in a tight 40-point range struggling to find any volatility, this is expected to change later on today after the ECB refinance rates. ✉️alfie@imsfx.co.uk ☎️ 0207 183 7928 #ratedecision #markets #ecb #fx

𝗪𝗵𝘆 𝗰𝗼𝗺𝗶𝗻𝗴 𝟲𝘁𝗵 𝗝𝘂𝗻𝗲 𝗶𝘀 𝗮𝗻 𝗶𝗺𝗽𝗼𝗿𝘁𝗮𝗻𝘁 𝗳𝗼𝗿 𝘁𝗵𝗲 𝗴𝗹𝗼𝗯𝗮𝗹 𝗲𝗰𝗼𝗻𝗼𝗺𝘆? 📆 Mark the day in your calendar❗ The European Central Bank (ECB) is going to decide on interest rates that day. After the last ECB meeting in April, its President Christine Lagarde said that ‘if a fresh assessment increased confidence of inflation heading back to target, then it would be appropriate to cut interest rates,’ as Reuters reports. The main grounds for interest rates cut are: ➡️stable inflation figures close to the target ➡️limiting wage growth.   I hope ECB will cut euro interest rates by 0.25 basis points (bp) and this is already expected by the market. This should be the beginning of further cuts: possibly in September and December – by another 25bp each, getting the ECB deposit rate from the current 4.00% to 3.25%. The interest rates reduction is vital for all investors, as it should positively impact valuations of assets and trigger business activity, including investments. Are you following the interest rates topic? Does it change your business environment or the way you do your business? Let me know in the comments below👇 #ECB #interestrates #globaleconomy

All eyes on the ECB next! After the BoC (Bank of Canada) delivered their first rate cut last night, the market looks to Lagarde and the ECB next. Macklem noted that further easing will be data-dependent and will be a "meeting-by-meeting" decision, and indeed stressed on inflation's trajectory and how the economy evolves. There is the growing theme in the markets now of "central bank divergence" particularly with the Fed, and Macklem did highlight that - "There are limits to how far we can diverge from the United States, but we're not close to those limits." Now, eyes turn to the ECB for their widely anticipated rate cut today, as the markets expect. But what will be more important is forward guidance and how Lagarde alludes to that in her presser. ECB officials have recently in their speeches cautioned on the "pace" of rate cuts post June. So, what the market will pay attention to, is whether Lagarde will highlight the meeting-by-meeting data dependency approach for post-June cuts... similar to what Macklem highlighted last night. Market pricing is for ~62bps by year-end so the questions of how many cuts, and which of those meetings will be cuts, is increasingly on the markets' radar. #lagarde #ecb #canada #macklem #monetarypolicy #macro #rates #fx #markets

ECB maintained its record-high interest rates while hinting upcoming cut On Thursday, the European Central Bank (ECB) maintained its record-high interest rates, while hinting at a potential reduction in the future as inflation in the euro zone continues to decrease, according to Reuters. https://lnkd.in/dqdVkXz4 The ECB, which serves as the central bank for the 20 nations using the euro, has held its deposit rate steady at 4.0% since September. This is part of an 18-month strategy to control prices. However, with inflation nearing the ECB’s 2% target, stagnant bank lending, and minimal economic growth, the ECB suggested a potential rate cut could be on the horizon. The ECB stated that if the Governing Council’s revised inflation outlook, the dynamics of core inflation, and the effectiveness of monetary policy transmission further bolster its confidence in sustained convergence of inflation to the target, it would be suitable to lessen the current level of monetary policy restriction. Even ECB policymakers who usually advocate for higher rates are supporting a rate cut at their meeting on June 6, assuming key indicators such as wage growth and core inflation continue to soften. However, this decision could be complicated by uncertainties surrounding the Federal Reserve’s ability to reduce its own rates in June, as U.S. inflation remains persistently above its target. https://bit.ly/3Ucm0tQ Per Jansson, Deputy Governor of Sweden’s central bank, commented on Thursday that if the U.S. Federal Reserve dismisses rate cuts in 2024, it could pose a “problem” for both the Riksbank and the ECB. Jansson emphasized that it’s crucial for inflation not to worsen. If that remains the case, he sees the main threat to a potential interest rate cut in May coming from other central banks delaying their rate-cut plans. This could weaken the krona and potentially drive up inflation again in the future, in a worst-case scenario. https://lnkd.in/dvk_gqGn Picture credit: europarl #ecb #inflation #eurozone #sweden #ratecuts #fed #interestrates

No surprises, as the European Central Bank (ECB) maintained its earlier inflation forecast in July 2024 and chose to leave interest rates steady based on available evidence. The rates for the deposit facility, marginal lending, and primary refinancing activities stayed at 3.75%, 4.5%, and 4.25%, respectively. Temporary circumstances caused several inflation measures to rise in May, but by June- most had stabilised or decreased. Profits have lessened the inflationary effect of high wage growth, and monetary policy is still tight. Despite this, there are still significant domestic pricing pressures and rising service inflation, and overall inflation- is predicted to remain above target for the upcoming year. The Council will continue to impose restrictive policy rates to bring inflation back to 2%. Following an earlier cut, the ECB has now backed itself into a corner where the efficacy of its monetary policy will dictate the outcome. The ECB will be flexible- on its approach, as the inflation remains sticky in the Euro Zone (higher for longer). Madam Lagarde is unlikely to indicate a September cut at this moment. EUR/USD: 1.0928 #ECB #EU #economy #interestrate #inflation #depositrate #markets

ECB maintained its record-high interest rates while hinting upcoming cut On Thursday, the European Central Bank (ECB) maintained its record-high interest rates, while hinting at a potential reduction in the future as inflation in the euro zone continues to decrease, according to Reuters. https://lnkd.in/dqgxDxa8 The ECB, which serves as the central bank for the 20 nations using the euro, has held its deposit rate steady at 4.0% since September. This is part of an 18-month strategy to control prices. However, with inflation nearing the ECB’s 2% target, stagnant bank lending, and minimal economic growth, the ECB suggested a potential rate cut could be on the horizon. The ECB stated that if the Governing Council’s revised inflation outlook, the dynamics of core inflation, and the effectiveness of monetary policy transmission further bolster its confidence in sustained convergence of inflation to the target, it would be suitable to lessen the current level of monetary policy restriction. Even ECB policymakers who usually advocate for higher rates are supporting a rate cut at their meeting on June 6, assuming key indicators such as wage growth and core inflation continue to soften. However, this decision could be complicated by uncertainties surrounding the Federal Reserve’s ability to reduce its own rates in June, as U.S. inflation remains persistently above its target. https://bit.ly/3Ucm0tQ Per Jansson, Deputy Governor of Sweden’s central bank, commented on Thursday that if the U.S. Federal Reserve dismisses rate cuts in 2024, it could pose a “problem” for both the Riksbank and the ECB. Jansson emphasized that it’s crucial for inflation not to worsen. If that remains the case, he sees the main threat to a potential interest rate cut in May coming from other central banks delaying their rate-cut plans. This could weaken the krona and potentially drive up inflation again in the future, in a worst-case scenario. https://lnkd.in/dCjfuZy4 Picture credit: europarl #ecb #inflation #eurozone #sweden #ratecuts #fed #interestrates

ECB raises rates to record high, signals end to hikes https://lnkd.in/eRmDFf4b #centralbank #ECB #economy #Eurozone #Europeanshares #Inflation #NewsOTG #newsotg

The ECB cut key interest rates by 25bp, as universally expected, but gave no clues about the path of further rate reductions. Growth and inflation forecasts have been revised upwards, reflecting recent data surprises. This makes this move a “hawkish cut”; but the medium term outlook remains broadly unchanged.

📉 ECB raises interest rates and the Euro keeps falling 📈 📌 On Thursday, the ECB raised interest rates for the tenth time in a row, signaling a shift in strategy toward maintaining rates high in order to keep inflation at bay. While analysts and investors currently consider this level to be the high point for borrowing costs in the current tightening cycle, the ECB president reiterated that she cannot yet say. 📌 According to the president, a "solid majority" welcomed the conclusion, while she recognized that some of her colleagues would have preferred a delay instead. Officials noted prior to the meeting that the decision was the most delicately balanced since the ECB began tightening in July 2022. 📌 The Governing Council reiterated that borrowing costs will be kept at "sufficiently restrictive levels for as long as necessary." This might leave the door open to more raises if inflation turns out to be more stubborn than expected. 📌 On wagers that the European Central Bank would stop rising interest rates, the euro was on track for its longest losing streak since its foundation. The currency plummeted for the ninth week in a row, the longest losing streak since its inception more than two decades ago. It's dropped 5.6% against the dollar since peaking in mid-July and is now trading near its lowest levels since March. Source: Bloomberg #ecb #euro #dollar #fx #interestrates #lagarde