ECB

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Concerns about wage growth to make ECB more cautious

Martin Wolburg (Generali AM) | Markets remain concerned in the home stretch of the fight against inflation that central banks should only reluctantly ease rates. Recently, ECB Governing Council members such as Schnabel and de Guindos warned about wage growth developments as an upside risk to inflation. Last week, German official wage data for the first quarter (+6.2% year-on-year) pointed in that direction and, at the eurozone level, negotiated first…


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Christine Lagarde insists ECB remains on track to cut interest rates in near term

Link Securities| In an interview for the US portal CNBC, ECB President Lagarde said yesterday that the central bank is still on track to cut interest rates in the short term, subject to any major shocks. She said they are observing a disinflationary process that is proceeding in line with their expectations. He added that they just need to build a little more confidence in this disinflationary process, but if…


ECB premises

ECB leaves open the possibility of interest rate cuts

Mirabaud: To no one’s surprise, the European Central Bank (ECB) has decided to keep official interest rates unchanged and has sent out a clearly pessimistic message. Inflation is expected to fall more than expected – it may not even reach 2% in 2026 – and economic growth is expected to be very limited: according to the latest ECB forecasts, gross domestic product (GDP) will grow by barely 0.6% this year….


guindos

De Guindos warns “open bar is over” in eurozone fiscal policy

Banca March| After years in which the monetary authority has been in charge of acquiring the debt of member countries and fiscal rules were frozen, the flexibility granted to fiscal policies must now be limited in order to contribute to lowering inflation and debt ratios. This has been repeatedly conveyed by the President and the Vice-President. However, she pointed out that the reduction of public deficits should be carried out…


green new deal

Lagarde points to broader Capital Markets Union and venture capital to promote energy transition

Banca March| Christine Lagarde has spoken out on independence and investment strategies in the eurozone. On the one hand, she stressed the need to be more self-sufficient in energy, by boosting investment in renewable energies such as green hydrogen and a smart grid system. The leader of the ECB provided numbers that would favour greater progress: 620,000 million euros per year in climate objectives and 125,000 million in the digital…


ECB bonds

ECB records first financial statement loss since 2004: €1.3 billion to be offset against future profits

Banca March: The monetary authority presented total losses of €7.9 billion in 2023, which, offset by the €6.6 billion of accumulated provisions in recent years, have resulted in this loss of €1.3 billion in profits. The reason for these results is due to the rise in interest rates, which has increased the payment to the national central banks. In fact, the net interest expense has risen from €900 million in…


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ECB: deposit rate therefore remains at 4%

Peter Goves (MFS Investment) | As widely expected, the ECB kept all three of its policy rates on hold at the January meeting. The deposit rate therefore remains at 4% and it has been held at this rate since September 2023. We would agree that the longer rates are held at such restrictive levels, domestic demand will remain subdued and (core) inflation will continue to fall. Today’s meeting affirms our…


Grifols

ECB reportedly asks some European banks to detail credit exposure to Grifols: Santander, BBVA and Caixabank in Spain

Alphavalue /Divacons| According to Reuters, citing sources familiar with the matter, the ECB has reportedly asked some European banks to detail their credit exposure to the Catalan blood products company. Grifols had a net financial debt of €9.5 billion, according to data published in September, with a maturity of €1.8 billion in 2024. According to LSEG data, banks with credit exposure to Grifols in our coverage include BNP Paribas, Santander,…


BCE noche

Some ECB Council members indicate inflation projections could be revised downwards

BancaMarch: Members of the ECB Council expect the new inflation projections published next March to be revised downwards. The current December forecasts foresee 2.7% in 2024 and 2.1% in 2025, without breaching the 2% red line until 2026 with expected inflation of 1.9%. However, the ECB indicates that these data could be more favourable, reaching the target level as early as 2025. While this is good news, the monetary authority…


BCE Atril

Credit demand remains very weak and credit standards tighten significantly

Link Securities | As published on Tuesday by the ECB, the monetary aggregate M3 declined 0.9% in the month of November at a year-on-year rate (-1.0% in October), slightly more than the 0.7% drop expected by the FactSet consensus of analysts. M1, which includes demand deposits, fell by 9.5% year-on-year in November, down from 10.0% in the previous month. The breakdown showed continued weakness in credit dynamics. The year-on-year growth…