Previous Trading Days Events 11.04.2024

The European Central Bank ECB kept interest rates at record highs yesterday but gave a clear signal that it may be preparing to proceed with cuts as inflation is heading towards the target level.

The central bank kept its deposit rate at 4.0, where it has been since September. But, with inflation now close to the ECBs 2 target, the ECB gave hints about a possible cut at its next meeting.

If the Governing Councils updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission were to further increase its confidence that inflation is converging to the target in a sustained manner, it would be appropriate to reduce the current level of monetary policy restriction, the ECB said.

With Thursdays decision, the ECB also left the interest rate on its daily and weekly loans for banks at 4.75 and 4.50 respectively.

Source httpswww.reuters.commarketseuropeecbholdsratesrecordhighssignalsupcomingcut20240411

According to the PPI data released yesterday, U.S. producer prices increased moderately in March calming fears of a resurgence in inflation. Milder increases in the inflation measures are expected after this release. However, the recent CPI inflation report was quite strong.

High inflation and persistent labour market strength have prompted financial markets and most economists to push back expectations for an initial Fed interest rate cut to September from June….