Sun, Jun 2 2024 7:29 PM EDT
CNBC Pro: Profits of these 5 global banks will stay high despite an ECB rate cut, says Berenberg
Despite an interest rate cut expected this week, profits at a handful of major European banks will remain robust, according to Berenberg.
One of the lender’s stocks could rise by more than 40% over the next 12 months, according to the investment bank.
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— Ganesh Rao
43 Mins Ago
German factory orders data falls short of expectations ahead of ECB decision
The European Central Bank’s set to make its decision on a day of weaker-than-expected data out of the euro zone’s largest economy, Germany.
New industrial orders in Germany were provisionally down 0.2% from the previous month, the federal statistics office said. Economists previously surveyed by Reuters had expected a 0.5% increase.
Orders were down 1.6% on an annual basis.
“New orders in April 2024 declined in four branches of manufacturing due to the significantly smaller number of large-scale orders compared with the previous month,” the statistics office said.
New orders rose 2.9% in April from March when excluding the traditionally more volatile large-scale orders.
— Sophie Kiderlin
An Hour Ago
There has been a ‘strong signal’ that the ECB will cut rates multiple times this year, economist says
European Central Bank policymakers are set to cut interest rates on Thursday, as the path ahead for inflation appears reassuring, Shaan Raithatha, senior economist at Vanguard Europe told CNBC’s “Squawk Box Europe” on Thursday. He added that multiple such rate reductions are on the horizon for 2024.
“Aside from slight momentum in services inflation in the most recent months it feels like the ECB have enough conviction to go ahead later today,” he said. “The inflation outlook is looking promising.”
ECB policymakers have also sent a “strong signal” that there will be further interest rate cuts beyond the one expected on Thursday, Raithatha said.
— Sophie Kiderlin
2 Hours Ago
Former ECB President Jean-Claude Trichet on prospect of rate cuts in Europe
The European Central Bank is likely to look past recent “bad news” on inflation to cut interest rates in June, but may only opt for one more reduction this year, Jean-Claude Trichet, former European Central Bank president, told CNBC’s “Squawk on the Street” on Tuesday.
“My intuition is that they will pull the trigger and decrease rates by point 25 percent, even if there has been some bad news… as regards the goal, which is to stabilize prices and having inflation going down,” Trichet said.
Bad news includes the recent upticks in headline inflation, core inflation and services inflation, and negotiated wages picking up in the first quarter of the year.
The good news is that euro zone unemployment is at an all-time low and purchasing managers’ index figures indicate an ongoing economic recovery, he added.
“We must accept that data could [change] month-on-month or quarter-to-quarter so we must be prudent… based on current data, instead of thinking [the ECB] would decrease [interest rates] twice after June, it is more reasonable to think of one decrease of rates,” Trichet said.
“But again this is my central intuition, it can change. We could have a lot of better news as regards inflation and we could have even more bad news,” he added.
— Jenni Reid
2 Hours Ago
European Central Bank won’t deliver back-to-back rate cuts but has plenty of scope to ease, economist says
Azad Zangana, senior European economist and strategist at Schroders, told CNBC on Tuesday he sees the ECB following through with its June cut, and then opting for reductions at alternate meetings for the rest of the year.
That would mean a total of three cuts implemented this year, with follow-ups in September and December, in line with the forecast in a recent Reuters poll of economists.
— Jenni Reid
Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
