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The European Central Bank has made significant progress in reducing inflation, but Vice President Luis de Guindos cautions that it cannot yet declare victory. He noted that while the disinflationary process is well underway, the outlook remains fraught with substantial risks.
A trader is betting €6 million on the European Central Bank accelerating interest-rate cuts, aiming for a €37.5 million payout if the deposit rate falls to 1.75% or lower by mid-next year. This strategy involves options on futures linked to the three-month Euribor funding rate.
Klaas Knot, a member of the European Central Bank Governing Council, emphasized the urgent need for European governments, particularly France, to improve their fiscal management. Speaking at a Group of 30 event in Washington, he called for significant fiscal consolidation in France to restore public finances to a stable condition.
The European Central Bank must remain flexible with interest rates due to a weak economy, according to Governing Council member Klaas Knot. He emphasized the importance of keeping all options open amid significant uncertainty regarding the supply side, which serves as a hedge against potential risks to growth and inflation.
Bundesbank President Joachim Nagel indicated that euro-area inflation might decline to the European Central Bank's target of 2% sooner than previously expected, potentially by 2025. He shared these insights while attending the International Monetary Fund's annual meetings in Washington.
Bostjan Vasle, a member of the European Central Bank's Governing Council, advises against hastily lowering interest rates or over-planning future cuts. He emphasizes a cautious, data-driven approach as borrowing costs near levels that neither hinder nor promote economic growth.
Gold prices have reached a record high above USD 2,758/oz, marking a 32% increase this year, driven by central bank easing, US election uncertainty, and ongoing geopolitical conflicts. With expectations of further Federal Reserve rate cuts and continued central bank diversification into gold, prices are projected to approach USD 2,850/oz by March 2025. Investors are advised to maintain a diversified portfolio with a 5% allocation to gold, leveraging its hedging qualities amid a declining interest rate environment.
European Central Bank President Christine Lagarde stated that the disinflation process is progressing well, despite ongoing wage pressure risks. She noted that recent economic activity indicators have been somewhat disappointing and that financing conditions continue to be restrictive.
The euro is set for its longest weekly decline against the dollar in eight months, with expectations rising for a half-point interest-rate cut by the European Central Bank in December. This marks the fourth consecutive week of losses, driven by signs of economic weakness in the euro zone, while the Federal Reserve may slow its rate cuts. The euro is currently trading around $1.08.
European Central Bank Governing Council member Gediminas Simkus emphasized that the focus should not be solely on the potential size of an interest-rate cut in December, but rather on the overall direction of borrowing costs. While market speculation includes a possible half-point reduction, Simkus stated he cannot currently justify such a significant move.
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ecb vice president warns of substantial risks to inflation outlook
21:07 28.10.2024
trader bets on swift ecb rate cuts for massive payout
16:19 28.10.2024
Klaas Knot calls for fiscal consolidation in France and Europe
18:47 26.10.2024
ECB urged to remain flexible on interest rates amid economic uncertainty
15:13 26.10.2024
ecb may achieve 2 percent inflation target sooner than expected
15:54 25.10.2024
ECB advised to proceed cautiously on interest rate decisions
15:44 25.10.2024
Gold prices soar to record highs amid geopolitical tensions and central bank easing
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15:14 25.10.2024
Lagarde confirms disinflation progress amid ongoing wage pressure risks
15:10 25.10.2024
euro faces longest weekly decline since February amid rate cut expectations
11:40 25.10.2024
ecb official downplays half-point rate cut focus on overall direction
10:17 25.10.2024
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