CNBC Pro: Profits at these 5 global banks will remain high despite ECB rate cuts, Berenberg says
Berenberg said profits at a handful of major European banks would remain strong despite expected interest rate cuts this week.
One of the bank’s shares could rise more than 40% over the next 12 months, according to the investment bank.
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— Ganesh Rao
German factory orders data misses expectations ahead of ECB decision
The ECB’s decision will come as Germany, the euro zone’s largest economy, releases weaker-than-expected data.
The German Federal Statistics Office said that new industrial orders in Germany fell by 0.2% quarter-on-quarter. Economists polled by Reuters had expected a 0.5% increase.
Order volume fell 1.6% compared with the same period last year.
“New orders fell in four manufacturing sectors in April 2024 as the number of bulk orders fell significantly compared with the previous month,” the statistics bureau said.
Excluding large-scale orders, which are traditionally volatile, new orders increased 2.9% in April compared with March.
——Sophie Kidlin
Economists say there is a ‘strong signal’ the ECB will cut interest rates multiple times this year
Shaan Raithatha, senior economist at Vanguard Europe, told CNBC’s “Squawk Box Europe” on Thursday that European Central Bank policymakers will cut interest rates on Thursday as the outlook for inflation appears reassuring. Multiple such rate cuts are expected in 2024, he added.
“Apart from the slight momentum in services sector inflation in recent months, the ECB appears confident enough to proceed later today,” he said. “The outlook for inflation looks promising.”
Raitata said ECB policymakers also sent a “strong signal” that interest rates would be cut more than expected on Thursday.
——Sophie Kidlin
Former ECB President Jean-Claude Trichet talks about prospects for interest rate cuts in Europe
Former European Central Bank president Jean-Claude Trichet told CNBC’s “Squawk on Tuesday’s “The Wall Street.”
Trichet said: “My gut feeling is that even if there is some bad news, they will pull the trigger and lower interest rates by 25%. As for the goal, which is to stabilize prices and reduce inflation.”
The bad news includes recent increases in headline, core and services inflation, as well as a rise in negotiated wages in the first quarter of this year.
The good news, he added, was that unemployment in the euro zone was at an all-time low and PMI data showed the economy was continuing to recover.
“We have to accept that the data may change on a monthly or quarterly basis, so we have to be cautious… based on current data, rather than thinking that the (European Central Bank) will lower (rates) twice after June, consider one rate cut It’s more reasonable,” Trichet said.
“But again, that’s my core gut feeling, and it could change. We could get a lot of good news about inflation, and we could get a lot of bad news,” he added.
—Jenny Reed
Economists say the ECB will not cut interest rates in succession, but there is plenty of room for easing
Azad Zangana, senior European economist and strategist at Schroders, told CNBC on Tuesday that he expects the ECB to deliver on its rate cut in June and then opt for other meetings throughout the rest of the year. Cut interest rates.
That would mean a total of three rate cuts this year, with follow-ups in September and December, in line with forecasts in a recent Reuters poll of economists.
—Jenny Reed
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