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ECB’s Lagarde says inflation to keep falling, economic growth to pick up this year

European Central Bank head Christine Lagarde on Friday told European Union leaders gathered in Brussels the eurozone’s inflation rate is set to keep on falling, while economic growth will start picking during the year. She added the euro area’s economic resilience needs higher productivity, which in turn would require higher investment. The capital market union is key to foster investment, she said. Source: Reuters (Reporting by Jan Strupczewki and Inti Landauro)

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Foreign investment flows into China shrink 19.9% in Jan-Feb

Foreign investment flows into China shrank 19.9% in January-February from a year earlier to215.1 billion yuan ($30 billion), data from the commerce ministry showed on Friday, even as the government gears up to woo foreign firms. China’scabinet on Tuesday unveiled new steps to arrest a slowdown in foreign investment, including expanding market access and relaxing some rules. Overseas firms have turned sour on China since it enacted ultra-strict COVID curbs during the pandemic then suddenly abandoned them in late 2022, with concerns over the business environment, a shaky economic recovery ...

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ECB increasingly likely to cut rates before summer break, Nagel says

The European Central Bank may be in a position to cut interest rates before the summer recess, possibly in June, as inflation is on its ways back to the bank’s 2% target, Bundesbank President Joachim Nagel said on Friday. The comments add Nagel to a long list of policymakers seemingly backing a cut in June and suggest the ECB will be the second major central banks after its Swiss counterpart to start unwinding a record string of rate hikes. “The probability is increasing that we will see the first rate ...

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US economy on solid ground as weekly jobless claims fall, home sales surge

The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, while sales of previously owned homes increased by the most in a year in February, signs the economy remained on solid footing in the first quarter. That was underscored by other data on Thursday showing business activity stable in March, though inflation picked up. Even a gauge of future economic activity turned positive in February for the time in two years. The United States continues to outshine its global peers, thanks to labor market resilience. The ...

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ECB tells banks to prepare for new types of risk

Euro zone banks must adjust how they manage risk as they face challenges from the end of ultra low interest rates to the emergence of non-traditional competitors that can quickly steal market share, the European Central Bank’s top supervisor said. Euro zone banks handled the recent surge in inflation and interest rates with remarkable ease and largely escaped last year’s U.S and Swiss banking turbulence, raising the risk of complacency and fuelling calls for lenders to prepare for more difficult times. Loan losses have remained exceptionally low, despite a near ...

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China’s consumer lenders set for shakeout as new rules raise the bar

China’s tightening of rules for consumer finance companies is likely to force consolidation in the roughly $120 billion sector that provides high-interest loans for millions of people shut out of traditional banking. The National Financial Regulatory Administration (NFRA) announced revamped and stricter rules for the sector on Monday, measures that are expected to drive China’s consumer finance companies to seek deeper-pocketed investors or merge. The tougher standards for the last line of credit for China’s riskiest borrowers are the latest steps aimed at containing financial risks in the world’s second-largest ...

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US nudges EU banks toward clean break with Russia

European banks have learnt the hard way that upsetting Uncle Sam is a bad idea. BNP Paribas, for example, in 2014 agreed to pay $9 billion to settle claims that it violated U.S. sanctions. That and other similar episodes should shape the way that lenders deal with their exposures to Russia – especially with Washington breathing down the neck of conspicuous holdout Raiffeisen Bank International RBIV.VI. The Austrian bank had been trying to salvage some value from its operations in Russia, which accounts for about one-tenth of its $215 billion ...

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ECB tries to dampen bets on streak of rate cuts

The European Central Bank tried to dampen speculation on a streak of interest rate cuts on Wednesday even as it acknowledged encouraging data about slowing price and wage rises. Many ECB policymakers have expressed support for a first reduction in borrowing costs from their current record highs, most likely in June, with the debate now focused on how many more cuts would follow. But President Christine Lagarde said the ECB could not commit to a certain number of rate cuts even after it starts reducing borrowing costs. “Our decisions will ...

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New York keeps top spot, London second in Z/Yen financial centresurvey

New York easily remains the world’s top financial centre, cementing its position for the past six years after it overtook London, in second place ever since, ahead of Singapore, the latest Z/Yen rankings of global financial centres showed on Thursday. Hong Kong remains in fourth place, followed by San Francisco nipping at its heels, helped by its strong role in financing tech. “The leading financial centres improved or maintained their ranking in Global Financial Centres Index 35, with a high degree of stability in the rankings,” said Michael Mainelli, the ...

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Bank of England sticks to the script and keeps rates on hold

The Bank keeps rates on hold as the hawks throw in the towel The Bank of England has kept rates on hold at 5.25% and more importantly, it’s keeping its so-called forward guidance unchanged. That guidance, which has stayed broadly the same for a few months now, says that rates need to stay sufficiently restrictive for an extended period of time. With neither a press conference nor new forecasts available at this meeting, there’s not a huge amount to chew over here, but two things stand out to us. The ...

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Investors tweak bets on ECB rate cuts to the dovish side after Fed, SNB

Investors tweaked views about the European Central Bank’s policy path to the dovish side on Thursday, and bond yields hit one-week lows after the Federal Reserve indicated 75 basis points of monetary easing in 2024 and the Swiss National Bank cut rates. The euro zone market reaction to the Bank of England (BoE) was muted while gilt yields extended their fall slightly. Money markets priced in a 90% chance of an ECB rate cut by June from less than an 80% chance late on Wednesday. They discounted more than 90 ...

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US retail sales to rise at a slower pace in 2024, says NRF

U.S. retail sales are expected to rise as much as 3.5% this year, a slower pace than 2023, industry body National Retail Federation said on Wednesday, as sticky inflation dampens hopes of a strong recovery in consumer spending. CONTEXT U.S. consumer prices increased solidly in February on higher costs for gasoline and shelter, the second straight month of firmer inflation readings from the Labor Department. Big retailers, including Walmart (NYSE:) and Target, have laid out conservative forecasts for the year, as shoppers navigate an uncertain macroeconomic environment. Mixed economic data ...

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India’s March business activity ends fiscal year on strong note -PMI

India’s business activity ended this fiscal year on a high note, expanding at the fastest rate in eight months in March, according to a business survey, suggesting the country would remain the fastest growing major economy. HSBC’s flash India Composite Purchasing Managers’ Index (PMI), compiled by S&P Global, rose to 61.3 this month from February’s final reading of 60.6. That extended the streak of expanding activity to 32 months. The 50-mark separates expansion from contraction on a monthly basis. “Led by the strongest manufacturing output in nearly three-and-a-half years, the ...

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UK consumer outlook most positive than since before pandemic, Next boss says

The outlook for the UK consumer is the best it has been than since before the pandemic in 2020, the boss of clothing retailer Next NXT.L said on Thursday. “We’re not negative about the consumer outlook, it’s a first for us for some time,” Next chief executive Simon Wolfson told Reuters after the group reported annual results. “That doesn’t mean we think the consumer environment’s going to be hugely ebullient, we just don’t think that the consumer’s facing the same headwinds they were facing at this time last year.” The ...

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Japan’s factory activity declines slow, service sector picks up

Japan’s factory activity shrank at a slower pace in March, while further expansion in the service sector supported overall growth in the private sector, a business survey showed on Thursday. The data comes after the Bank of Japan made a historic policy shift this week by ending radical stimulus and raising interest rates for the first time in 17 years. The flash au Jibun Bank Japan manufacturing purchasing managers’ index (PMI) rose to 48.2 in March from 47.2 in February. While the index has remained below the 50 index level ...

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