A Better Hedge Than Gold?

While the whole world is piling into gold as a hedge... White House documents reveal Trump is betting big on a completely under-the-radar resource. This little-known resource is minting 1,600 millionaires every single day... And investors have a rare opportunity to take advantage before everyone else catches on.

European Central Bank likely to cut rates while weighing US trade concerns and France's chaos

DAVID McHUGH
December 12, 2024

FRANKFURT, Germany (AP) -- With U.S. President-elect Donald Trump threatening new tariffs and political chaos engulfing France, the European Union's second largest economy, the question ahead of the European Central Bank meeting Thursday is not whether it will cut interest rates, but by how much.

Analysts see a quarter-point rate cut from the current ECB benchmark rate of 3.25% as the most likely option when the bank's rate-setting council meets at its skyscraper headquarters in Frankfurt.

But the prospect of a half-point cut isn't out of the question for the bank and its President Christine Lagarde as new risks that emerged since the bank's last meeting on Oct. 17 cast a shadow over an already tepid recovery from a post-pandemic stagnation.

Trump's election victory on Nov. 5 heightened the prospect of a more protectionist U.S. trade policy, such as new or higher tariffs on imported goods, after he takes office on Jan. 20. That sends a cold chill through the business world in Europe, where exports are an outsized contributor to growth and employment.

Yet there are internal risks as well.

French Prime Minister Michel Barnier resigned Dec. 5 after losing a vote of confidence, leaving the France without a functioning government and no clear majority in parliament able or willing to tackle the country's excessive budget deficit. Elections cannot be held before June. While the end of the Barnier government hasn't triggered a financial crisis, it adds uncertainty about how long it will take for France to right its finances.

A half-point cut "would be a security move to preempt any potential risks for the eurozone economy coming from the next U.S. administration's potential economic policy choices and political woes in France and Germany," said Carsten Brzeski, chief eurozone economist at ING bank.

Opting for a quarter-point move "would rather follow the cautious meeting-by-meeting approach" that the bank has pursued since it started cutting rates in June, Brzeski said. One argument for a smaller rate cut might be a reluctance by the ECB to risk the perception that it is getting involved in French national politics: "This is speculation the ECB would clearly rather avoid," Brzeski said.

Germany's governing coalition broke up in November, and a new national election is expected Feb. 23. Weeks of coalition negotiations are expected to follow before a new government is in place. That leaves the two biggest eurozone economies politically adrift for months.

All that has dinged the confidence that businesses need to borrow, invest, expand production and take risks. The survey index of purchasing managers compiled by S&P Global came in at 48.3 in November, with levels below 50 suggesting the economy is slowing. The Sentix survey of investor confidence fell in its first update after the U.S. election, by 4.6 points to minus 17.5.

Inflation has fallen steeply to 2.3% from its peak of 10.6% in late 2022, shifting attention from reigning in consumer price increases to worries about ongoing weak growth. The eurozone is expected to grow 0.8% this year and 1.3.% next year, according to forecasts from the European Union's executive commission.

Higher ECB rates helped squelch Europe's outbreak of inflation in the wake of the pandemic and Russia's invasion of Ukraine. Higher central bank benchmarks influence borrowing costs throughout the economy, making it more expensive to borrow and spend, and thus taking pressure off prices.

Yet that also presents a danger in that those same high rates could stall the EU's goal of more vigorous economic growth.

A drumbeat of announcements regarding job cuts in coming years at major firms in Germany has not improved the mood. They include auto technology and parts firm Bosch, which plans to drop 5,500 jobs, 3,800 of them in Germany; auto supplier ZF Friedrichshafen, which plans to drop 14,000-15,000 jobs; and Ford Motor Co., which is to drop 4,000 jobs in Europe, 2,900 in Germany, and steelmaker ThyssenKrupp with 11,000 planned cuts. Volkswagen plans to shut as many as three German plants, according to its employee representatives who are negotiating with the company in an effort to block the closings.

The ECB determines interest rate policy for the 20 of 27 EU member countries that have joined the euro currency.

Continue Reading...

Popular

Musician Made $3 Million From NFTs — Then Faced a Brutal Tax Hit and Crypto Crash

Jonathan Mann, a non-fungible token (NFT) artist, has spun his taxing experience with cryptocurrency into a song.

Mark Cuban Challenges Concept of Work-Life Balance for High Achievers: Not Working 'Would Be a Sacrifice'

Mark Cuban recently expressed his views on the concept of work-life balance, particularly for those striving to excel in their respective fields.

This Move Won't Stay Quiet for Long - Ad

They just made a $100M bet on blockchain. Early insiders are already circling.

Cathie Wood Drops $373 Million On Circle's 168% Rally, Dumps Coinbase And Crypto Holdings — Is Ark Ditching Bitcoin for Stablecoins?

Cathie Wood's Ark Invest made a blockbuster purchase of Circle Internet Group (NYSE:CRCL) shares on Thursday, marking a significant move in the evolving digital assets landscape.

A Bold Pivot Into Solana Is Here - Ad

This quiet NASDAQ company just made a move insiders say could be the next big crypto proxy.

Elon Musk Criticized for Linking Minnesota Assassination to 'Far Left'

Elon Musk has drawn criticism for attributing the murder of a Minnesota lawmaker to the "far left," a claim that was even refuted by his own AI chatbot, Grok.

One Tech Tip: How to protect your 23andMe genetic data

Remember 23andMe? The company that gave customers to learn about their ancestry?

Solana-Backed Company Goes All In - Ad

A quiet $100M move could turn this overlooked firm into a blockchain market leader.

Ryan Reynolds Flames Neil Patrick Harris For Taking Over Deadpool Role In Meta Quest VR Game

Ryan Reynolds humorously responded to Neil Patrick Harris taking over the Deadpool role in Meta Quest's upcoming VR game, playfully calling Harris a "butthole" for stealing his signature role.

How high will Bitcoin go in 2025? - Ad

A new coin is emerging in the crypto bull market. Investing now could be like buying Bitcoin in 2013. Before it took off. Or scooping up Ethereum in 2017.. before it soared.

Arrive AI (ARAI) Stock Skyrockets 79% On New Climate-Control Patent

Arrive AI stock is skyrocketing over 114% after the company announced a new patent. Its new patent enables smart mailboxes to heat or cool time-sensitive package deliveries.

Hasbro Cuts 3% Of Global Workforce: Report

Toy company Hasbro Inc (NASDAQ:HAS) announced a workforce reduction on Tuesday as the company grapples with tariff impacts.

Why BlackRock is Hoarding 6X More Bitcoin Than Miners Produce - Ad

A Bitcoin supply shock is building. Institutions and ETFs are buying faster than miners can keep up - creating a shortage most investors haven't noticed. If Bitcoin hits $300K, altcoins could explode 1,000%+. We wrote Crypto Revolution to help you prepare.

How to Hack a $1.3T Market - Ad

Forget concrete. The new foundation for real estate success is digital, and Pacaso leads the way. Their tech unlocks a $1.3T real estate market. They've already earned $110M+ in gross profits in their operating history and reserved the Nasdaq ticker PCSO.

The Tesla Shock Nobody Sees Coming - Ad

While headlines scream "Tesla is doomed"...Jeff Brown has uncovered a revolutionary AI breakthrough buried inside Tesla's labs. One that is helping AI escape from our computer screens and manifest itself here in the real world all while creating a 25,000% growth market explosion starting as early as July 23rd.

Autoliv Boosts Shareholder Returns With 21% Dividend Hike, New $2.5 Billion Buyback Program

Autoliv, Inc. (NYSE: ALV) announces dividend boost and buyback program at CMD, reiterates growth outlook and Q1 earnings beat expectations.

Inflation data threatened by government hiring freeze as tariffs loom

WASHINGTON (AP) — The Labor Department has cut back on the inflation data it collects because of the Trump administration's , raising concerns among economists about the quality of the inflation figures just as they are being closely watched for the impact of tariffs.

Is Elon's Empire Crumbling? - Ad

Jeff Brown - the legend who called Tesla and Nvidia early - says Elon is about to launch a $25T AI revolution. This isn't another chatbot. It's real-world AI that could 14X the impact of ChatGPT. But after July 23rd, it may be too late.

Benzinga Bulls And Bears: Eli Lilly, Okto, McDonalds — And Israel-Iran Conflict Sparks Oil Surge

Benzinga examined the prospects for many investors' favorite stocks over the last week — here's a look at some of our top stories.

Former Zillow Execs Target $1.3T Market - Ad

One co-founded Zillow. The other sold his company to Zillow for $120M. Now they're transforming a $1.3T market via co-ownership. Pacaso's already earned $110M+ in gross profit and reserved the Nasdaq ticker PCSO.

Fartcoin Slides 10% In A Day: What Is Going On?

Despite a 10% drop, traders bullish on Fartcoin due to liquidity zones and meme coin trends. Wallet invested $2.25M, may recover investment.

Cloudflare To Raise $1.75 Billion In Note Offering For Expansion

Cloudflare, Inc. announced pricing of $1.75B convertible senior notes due 2030, option for additional $250M, and intends to use proceeds for corporate purposes.

A Better Hedge Than Gold? - Ad

While the whole world is piling into gold as a hedge... White House documents reveal Trump is betting big on a completely under-the-radar resource. This little-known resource is minting 1,600 millionaires every single day... And investors have a rare opportunity to take advantage before everyone else catches on.

Lockheed Martin, RTX, General Dynamics And Other Defense Stocks Rise In Friday Pre-Market: What's Going On?

Shares of defense stocks Rtx Corp (NYSE: RTX), Lockheed Martin Corp (NYSE: LMT) and General Dynamics Corp (NYSE: GD) climbed 4.6%, 4.2% and 1.2%, respectively during Friday pre-market trading session amid Israel's intensifying military operations in Lebanon and Iran.

This Move Won't Stay Quiet for Long - Ad

They just made a $100M bet on blockchain. Early insiders are already circling.

Cathie Wood Dumps $1.8 Million In Coinbase Stock As Bitcoin Nears $110K All-Time High

On Monday, Cathie Wood-led Ark Invest made a notable move by selling shares of Coinbase Global Inc. (NASDAQ:COIN) across its ETFs.

A Bold Pivot Into Solana Is Here - Ad

This quiet NASDAQ company just made a move insiders say could be the next big crypto proxy.

Gen Z Feels Judged For Their Money Decisions And Half Faults Schools For Budget Blowups, Finds Poll

Gen Z struggles with money as 2/3 face criticism for spending and 50% blame schools. Parents help but long-term prospects look good for wealthiest generation ever.

Solana-Backed Company Goes All In - Ad

A quiet $100M move could turn this overlooked firm into a blockchain market leader.

Dundee To Acquire Adriatic Metals In $1.25B Deal For Bosnian Silver-Zinc Mine

Dundee Precious Metals (OTCPK: DPMLF) has signed a deal to acquire UK-based Adriatic Metals (OTC: ADMLF) for $1.25 billion.

Trending Now

Information, charts or examples are for illustration and educational purposes only and not for individualized investment management This message contains commercial elements, such as advertising. We only send these offers to those who have opted in to our newsletter. Past performance is not indicative of future results. For these reasons we strongly suggest trading in a DEMO/Simulated account. The information provided by us is for educational and informational purposes only. We make no representations or warranties concerning the products, practices or procedures of any company or entity mentioned or recommended and have not determined if the statements and opinions of the advertiser are accurate, correct or truthful. If you use, act upon or make decisions in reliance on information contained or any external source linked within it, you do so at your own peril and agree to hold us, our officers, directors, shareholders, affiliates and agents without fault.

Copyright technicaltrading.org
Privacy Policy | Terms of Service