Newscasts - Europe Markets Briefing: ECB holds rates

Husqvarna AB

18/07/2024 16:25

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Source: 'Reuters - Business videos'

Description: The ECB kept its three major interest rates unchanged for a
second month, and says it won't commit to any particular rate cut path for as
long as inflation remains above the Bank's 2% target.
Short Link: https://refini.tv/3Y9eH8B

Video Transcript:

The European Central Bank holds rates steady as expected but refuses to be
drawn on a potential September cut. Welcome to your Europe Markets Briefing.
I'm Thomas Warner. The ECB kept its three major interest rates unchanged for a
second month. The bank cited stubborn inflation for its decision, particularly
in the service sector, and it says it won't commit to any particular rate cut
path for as long as inflation remains above the bank's 2% target.

We are determined to ensure that inflation returns to our 2% medium-term
target in a timely manner. We will keep policy rates sufficiently restrictive
for as long as necessary to achieve this aim. We will continue to follow a
data-dependent and meeting-by-meeting approach to determining the appropriate
level and duration of restriction.

Bond markets had already priced in the hold and showed little sign of any
change in direction. They still expect to cut in September. The German 10-year
was steady at three-week lows, while the more rate sensitive two year was also
unchanged from before the ECB's announcement. Europe's equity markets extended
gains after the rate decision and a busy day of corporate earnings gains in
the stocks index of Europe 600 biggest companies was led by automakers. The
FTSE also digested a slew of corporate earnings and data that showed wage
growth much higher than the Bank of England would like to see ahead of its
meeting next month. Earnings were also the main drivers on the DAX and the CAC
40 healthcare and real estate were the biggest gaining sectors on the CAC.
Volvo Cars rose nearly 9%, helping lift auto stocks by around 2%, with Swedish
automotive producers second quarter adjusted EBIT came in above expectation.
Moving the other way, though, was finished telecom equipment maker Nokia. It
shared 4% after reporting a 32% decline in quarterly profit, but it says more
orders from the US should lift overall sales by the end of this year. And
Husqvarna slumped 13% after the Swedish garden equipment maker posted a 9%
drop in its quarterly sales. It blamed cautious consumer spending and was on
track to be the STOXX 600 single biggest faller. Finnish elevator maker Kone
is one of several northern European companies reporting Q2 results on Friday.
It's expected to post single digit growth in revenue and in profits for the
period, having secured a deal to refit London's 30 high Skyscraper. Danske
Bank, Skanska, Electrolux and Finnair are all also reporting. UK retail sales
figures due tomorrow are expected to reveal a month on month fall of 0.4% in
June due to bad weather, but GfK's consumer confidence readings forecast to
hit its highest since August 2021. The survey of consumer sentiment for the
year ahead has been trending higher ever since. Then Prime Minister Liz
Truss's mini budget in autumn of 2022. In Germany, producer price data for
June is seen slightly higher, up just 0.1% on the month. It's been basically
flat since March. Lower energy costs mean that analysts expect producer prices
to come in 1.6% lower year on year. And that is your Europe Markets Briefing