euro

Euro-Dollar weakens ahead of Fed, Lagarde cites lower inflation

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Euro-Dollar weakens ahead of Fed, Lagarde cites lower inflation

The EURUSD pair declined to the lower 1.0800s after European Central Bank (ECB) speakers, including President Christine Lagarde and Bank of Ireland Governor Gabriel Makhlouf, cited lower inflation. Lagarde mentioned a decrease in wage inflation and stated that the ECB is closely monitoring this before deciding on future policy moves. Lower inflation could lead to the ECB cutting interest rates, negatively affecting the Euro and the EURUSD pair. Lagarde noted that average wage growth for 2024 fell from 4.4% to 4.2% between the ECB’s January and March meetings. She mentioned the need for more evidence of receding inflation but suggested that rate hikes could be dialed back in June if data aligns with current expectations. The ECB is divided into two camps regarding the timing of interest rate decisions. ECB Vice President Luis de Guindos, preferring to wait until the June meeting, highlighted that services inflation remains too high. The Federal Reserve is expected to complete its March policy meeting without changing interest rates but may revise its quarterly forecasts and statement, potentially affecting the US Dollar valuation. Speculation exists that the Fed might adjust its economic forecasts in the Summary of Economic Projections (SEP) and the “dot plot,” possibly revising down the forecasted rate cuts in 2024 due to persistent inflationary pressures.

‘PV for all’ supporting China, not EU

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‘PV for all’ supporting China, not EU

The Cyprus government’s ‘photovoltaics for all’ scheme, aimed at encouraging households to install solar energy panels to meet the EU’s climate-neutral target by 2050, has been criticized for favoring Chinese manufacturers. European solar manufacturers are considering laying off about 4,000 skilled workers due to competition from Chinese PV panel imports, which have flooded the market with cheaper options. The scheme offers no-deposit funding for up to 4kW of PV panels on 6,000 homes, primarily benefiting Chinese solar panel importers. These panels are considered to have inferior efficiency ratings and questionable durability compared to European variants, which often come with 30-year guarantees. The average cost of a kit is between 6,000 to 6,500 euros, with a grant of up to 5,000 euros provided, which is added to the consumer’s electricity bill as a no-interest loan over 4 to 5 years. There is an additional 1,500 euro grant available for those who can afford to invest directly in a PV system with their own money. However, the government is known for delayed payments to suppliers, leading some to prefer dealing directly with solar energy companies for the refund.

Hellenic rolls out new fixed-deposit offering

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Hellenic rolls out new fixed-deposit offering

Hellenic Bank has introduced a new product called the “18-month Euro Fixed Deposit,” designed for both retail and corporate customers. This product offers an 18-month fixed-term deposit with a 1.5 percent interest rate, applicable for amounts of €20,000 and above, and is available in euros. Customers have the option to either automatically renew the deposit upon maturity or have the interest paid into their account. This product offers a higher interest rate compared to other deposit products by Hellenic Bank and is available for creation online through Online Banking for individual customers.

Government , ‘has no plan B’ over Vasiliko LNG terminal

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Government , ‘has no plan B’ over Vasiliko LNG terminal

The Vasiliko liquefied natural gas (LNG) terminal project in Cyprus is currently stalled, with no alternative plan (“plan B”) in place, as stated by Energy Minister George Papanastasiou. The project is facing delays due to arbitration proceedings between the Republic of Cyprus and the Chinese-led consortium responsible for building the LNG plant. Despite reservations about the consortium, the government aims to complete the project with the current contractor as the fastest solution, requiring the project to be delivered by July 2024. This deadline comes after two previous extensions, with the initial completion date set for September 2022. Papanastasiou remains optimistic about the project’s completion and is in discussions with the Chinese Ambassador Liu Yantao. Concerns about potential violations and the need for possible criminal investigations have been raised, with some suggesting the matter be referred to the Anti-Corruption Authority.

Euro awaits US data, ECB speakers

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Euro awaits US data, ECB speakers

The EURUSD exchange rate was trading in the mid 1.0900s after reaching a peak at 1.0981 the previous week. Upcoming data releases and events are expected to introduce some volatility to the Euro-dollar pair. In the US, upcoming factory gate inflation and Retail Sales data could influence expectations regarding the Federal Reserve’s timeline for interest rate cuts, which is a significant factor for the US Dollar. Economists anticipate a decrease in Core PPI to 1.9% year-over-year in February from 2.0% in January, with a month-on-month forecast showing a 0.2% increase compared to the 0.5% increase the previous month. The headline Producer Price Index (PPI) is expected to show a 1.1% year-over-year gain, up from 0.9% in January, and a 0.3% month-on-month gain, consistent with the previous month. This data is a crucial indicator for CPI inflation, as increases in wholesale costs are typically passed on to consumers. Market participants are betting on a 67.2% probability of the Fed cutting interest rates in June, according to the CME FedWatch Tool. US Treasury Secretary Janet Yellen stated that it seems unlikely for interest rates to return to pre-COVID-19 levels and deemed the interest rate projections in President Biden’s budget plan as “reasonable.” In Europe, several ECB officials are set to speak, potentially providing insights into whether interest rates will be cut in April or June. If inflation remains high, interest rates are likely to stay elevated, supporting the Euro. ECB Governing Council member Francois Villeroy de Galhau indicated a preference for an April rate cut, while Bank of Austria Governor Robert Holzmann and ECB President Christine Lagarde suggested a June timeline for revisiting rate policies. The timing of ECB rate cuts could impact the Euro and EURUSD exchange rate. After recent US inflation data, a calmer period is expected in the EURUSD pair ahead of the next week’s Federal Reserve meeting.

Adidas posts first loss in 30 years

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Adidas posts first loss in 30 years

– Adidas posted its first annual loss in more than 30 years and warned that sales in North America would fall again due to high inventories among sportswear retailers in the U.S.
– The company cut ties with Kanye West in October 2022, suspending sales of the Yeezy sneaker line.
– CEO Bjorn Gulden resumed sales of Yeezy sneakers to clear stock and focused on boosting sales of Samba and Gazelle shoes.
– Adidas shares have recovered, outperforming Nike and Puma since Gulden took over.
– Adidas expects sales in North America to fall by around 5% this year.
– Sales in North America fell by 21% in the fourth quarter and by 16% over the year.
– Adidas reduced its inventories by 1.5 billion euros in 2023, a 24% decline.
– The company has experienced shipment delays due to the Red Sea crisis.
– Adidas aims to improve its underlying business, excluding Yeezy, with a growth target of at least 10% in the second half of 2024.
– The trend for low-rise suede “terrace” sneakers like Samba and Gazelle has benefited Adidas, with footwear sales growing by 8% in the fourth quarter.
– In China, Adidas expects sales to grow at a double-digit rate after an 8% increase in 2023.
– Adidas made 750 million euros in revenue from Yeezy sales last year, resulting in a 300 million euro profit.
– The company plans to propose an unchanged dividend of 0.70 euros per share on its 2023 performance despite a net loss of 58 million euros, its first since 1992.

EURGBP gains ground following UK jobless, German CPI

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EURGBP gains ground following UK jobless, German CPI

– Euro-Sterling was trading below the mid-0.8500s during early European trading on Tuesday.
– The EURGBP cross was trading around 0.8540, gaining 0.16% on the day.
– The UK ILO Unemployment Rate increased to 3.9% in the three months to February from 3.8%.
– The number of people claiming jobless benefits in the UK rose by 16,800 in February.
– The UK Employment Change was -21,000 in January.
– The German Consumer Price Index (CPI) for February was 0.4% MoM and 2.5% YoY.
– The German Harmonized Index of Consumer Prices (HICP) for February was 0.6% MoM and 2.7% YoY.
– Upcoming data releases include the UK monthly GDP, Industrial Production, Manufacturing Production, and Trade Balance for January.

Eurozone to phase out energy support measures

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Eurozone to phase out energy support measures

Eurozone finance ministers decided to gradually phase out energy support measures in 2024 to reduce government deficits. This decision was emphasized during the Eurogroup meeting of finance ministers. The Cyprus government plans to end the reduced consumer tax on car fuel and the subsidy of electricity bills by the end of April 2024. A political agreement on reforming the EU’s economic governance framework was reached in February 2024, with optimism for its early adoption. Ministers provided a cautiously optimistic outlook for the euro area’s economy in 2025, citing a robust labour market and a downward inflation path. However, they acknowledged economic risks due to global uncertainty. The reformed framework aims at strengthening debt sustainability and promoting growth through structural reforms and investment. An overall slightly contractionary fiscal stance is expected in the euro area for 2025, focusing on priority areas like the green and digital transition and defence capabilities, with an emphasis on improving the efficiency, quality, and composition of public spending.

Apply for postgraduate studies at University of Cyprus

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Apply for postgraduate studies at University of Cyprus

The University of Cyprus (UCY) is accepting applications for its postgraduate programmes (Master and PhD level) for the academic year 2024/2025. UCY offers over 100 graduate programmes in various subjects, with many taught in English. The application deadline is April 2, 2024. UCY is ranked in several global university rankings, including #701-800 in the Academic Ranking of World Universities (ARWU) for 2023-2024, #501-600 in the Times World University Rankings, #64 in the Emerging Economies University Rankings, #368 in the QS World University Rankings, and #53 in the QS Emerging Europe and Central Asia Rankings.

EURUSD recovers after release of US NFP

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EURUSD recovers after release of US NFP

– The EUR/USD pair increased after US Nonfarm payrolls data showed a decrease in Average Hourly Earnings and an increase in the Unemployment Rate.
– The US economy added 275,000 jobs in February, more than the 200,000 expected.
– Average Hourly Earnings rose by 4.3% YoY and 0.1% MoM, both below the predicted 4.4% and 0.3%.
– The Unemployment Rate increased to 3.9%, higher than the expected 3.7%.
– This data could lead the Federal Reserve to cut interest rates earlier than anticipated.
– Francois Villeroy de Galua, Governor of the Bank of France and ECB Governing Council member, stated a rate cut in spring is “very likely.”
– Joachim Nagel, Bundesbank President, mentioned the increasing probability of an interest-rate cut before the summer break.
– ECB President Christine Lagarde indicated June as the next key date for reviewing policy on interest rates.
– The EUR/USD is in a short-term uptrend due to the anticipation that the US Fed might lower interest rates sooner than the ECB.
– Technical analysis suggests a tentative short-term uptrend for EUR/USD, with recent signs indicating a possible correction.