ING: Trump trade war could push the eurozone economy into decline.
A looming novel trade war triggered by Donald Trump could push the eurozone economy from sluggish increaseth into “a filled-blown decline”.
That’s the watch of the arrangeatement prohibitk ING, which worrys the decline could commence even before Trump – who has shelp he wants to impose a 10% tariff on all non-US excellents – is sworn in next January.
ING says:
The already struggling German economy, which heavily relies on trade with the US, would be particularly challenging hit by tariffs on European automotives. Additionpartner, uncertainty about Trump’s stance on Ukraine and NATO could undermine the recently stabilised economic confidence indicators atraverse the eurozone.
Even though tariffs might not impact Europe until tardy 2025, the renoveled uncertainty and trade war worrys could drive the eurozone economy into decline at the turn of the year.
ING also foresees that the European Central Bank will insist to do the “weighty lifting” of protecting Europe’s economy by cutting rates, while politicians paemploy to see what policies Trump actupartner carry outs.
It elucidates:
With these election results, a 50bp rate cut at the ECB’s December greeting has become more foreseeed, with awaitations of the deposit rate dropping to at least 1.75% by timely summer, possibly trailed by further easing towards the finish of 2025.
Even though Trump's tariffs might not impact Europe until tardy 2025, the renoveled uncertainty and trade war worrys could drive the eurozone economy into decline at the turn of the year.https://t.co/mPyiauahuO
— ING Economics (@ING_Economics) November 6, 2024
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Even though Trump’s tariffs might not impact Europe until tardy 2025, the renoveled uncertainty and trade war worrys could drive the eurozone economy into decline at the turn of the year.https://t.co/mPyiauahuO
— ING Economics (@ING_Economics) November 6, 2024
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Speaking in parliament, Kuo shelp the impact of any Trump tariffs on China for Taiwanese firms manufacturing there would be “quite big”, Reuters tells.
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Kuo includeed:
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“We will as soon as possible come up with help for Taiwan companies to transfer their production bases.”
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Trump has menaceened to impose tariffs of 60% on US presents of Chinese excellents, which would menaceen increaseth at the world’s second-bigst economy.
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Economics minister foresees Trump tariffs will hit Taiwanese companies in China challengingest https://t.co/zWtIfv28Ae
— Taiwan News (@TaiwanNewsEN) November 7, 2024
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Donald Trump’s election triumph and the menace of tariffs will force policyproducers to be more pimpolitent as they transport down interest rates, the European Central Bank’s vice plivent Luis de Guindos has shelp.
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De Guindos shelp the heightened uncertainty folloprosperg Trump’s reapprehfinish of the White House unkindt the menace of trade tariffs could be includeed to the uncertainty produced by the war in Ukraine and the middle east dispute.
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Speaking at University College London on Wednesday, he shelp the ECB was foreseeed to get “minuscule steps, low steps” in its approach to transporting down interest rates, scotching speculation of a cut in the cost of borroprosperg at the central prohibitk’s next greeting by 0.5 percentage points from 3.75%.
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Some analysts had specutardyd that the ECB would transfer rapidly to bolster the eurozone economy ahead of menaceened tariff incrmitigates on European and Chinese excellents folloprosperg Trump’s inaguration in January.
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“Uncertainty is on the ascfinish,” de Guindos shelp.
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It is huge. And because of that you insist to be pdimiserablemirefulnt.
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De Guindos, who was the first member of the ECB’s 26-strong regulateing council to reply to Trump’s electiion, shelp it will get time to appraise how trade policies under Trump will impact the economy.
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“If you ask me, are you going to react instantly? — No,” he shelp.
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What we will do is we will integrate into our projections the trade policy that is proclaimd by the novel US administration. And we will get into ponderation all the elements. Trade policy, plus the evolution of insist, plus the evolution of energy prices.
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But he includeed: “Tariffs will impact increaseth pessimisticly and inflation pessimisticly.”
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In the unkindtime he shelp policyproducers would persist to be directd by data and watch particularly shutly at its prohibitk lfinishing survey to remend whether firms are receiving the loans they insist to increase arrangeatement.
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He shelp prohibitk lfinishing was feeding thcdimiserablemireful to the authentic economy folloprosperg two cuts in interest rates by the ECB, but inflation and economic increaseth had sluggished quicker than awaited.
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He shelp it was clear from the US election that inflation had joined a key role.
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It’s quite clear that inflation is a tax the low income people, because it’s quite clear that they use the big part of their incomes. And they use the comfervent of items where prices have been rising the most.
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And even though you understand it’s clear that the inflation rate is declining, househageders and users, watch at prices that are 20% or 30% higher than two years ago.
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Investors and economists are bracing for further economic pain in Europe from a second Donald Trump plivency that could direct to hefty tariffs on European ships into the US.
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Berenberg prohibitk is cautioning this morning that Trump’s return to the White House implies “ponderable trade policy hazards and geopolitical uncertainty” for European businesses.
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Germany – where the regulatement is on the brink of collapse folloprosperg the unawaitedly sacking of the finance minister yesterday – is particularly exposed.
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Holger Schmieding, Berenberg’s chief economist, says:
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We suppose that Trump will initipartner impose only pickive but headline-grabbing tariffs, while menaceening to go much further if China and Europe do not propose him meaningful concessions in negotiations. That would be akin to his approach in 2017-20.
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Viewed in isolation, such an escalation of trade tensions could drop 2025 increaseth in the Eurozone by c0.3 percentage points and in heavily exposed Germany by as much as c0.5 percentage points as uncertainty weighs on business confidence and arrangeatement.
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However, the eurozone should advantage from the “momentary spiladorer from more US domestic insist” and a stronger US dollar, which produces euro-priced excellents more competitive.
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As a result, Berenberg has only trimmed its 2025 annual increaseth foresees modestly. Growth in the eurozone next year has been droped from 1.1% to 1.0%, for France from 0.8% to 0.7%, and for Italy from 0.9% to 0.8%.
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Germany will foreseeed be hit challenginger, with increaseth of equitable 0.3% instead of 0.5% next year, it includes.
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A looming novel trade war triggered by Donald Trump could push the eurozone economy from sluggish increaseth into “a filled-blown decline”.
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That’s the watch of the arrangeatement prohibitk ING, which worrys the decline could commence even before Trump – who has shelp he wants to impose a 10% tariff on all non-US excellents – is sworn in next January.
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ING says:
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The already struggling German economy, which heavily relies on trade with the US, would be particularly challenging hit by tariffs on European automotives. Additionpartner, uncertainty about Trump’s stance on Ukraine and NATO could undermine the recently stabilised economic confidence indicators atraverse the eurozone.
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Even though tariffs might not impact Europe until tardy 2025, the renoveled uncertainty and trade war worrys could drive the eurozone economy into decline at the turn of the year.
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ING also foresees that the European Central Bank will insist to do the “weighty lifting” of protecting Europe’s economy by cutting rates, while politicians paemploy to see what policies Trump actupartner carry outs.
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It elucidates:
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With these election results, a 50bp rate cut at the ECB’s December greeting has become more foreseeed, with awaitations of the deposit rate dropping to at least 1.75% by timely summer, possibly trailed by further easing towards the finish of 2025.
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Even though Trump's tariffs might not impact Europe until tardy 2025, the renoveled uncertainty and trade war worrys could drive the eurozone economy into decline at the turn of the year.https://t.co/mPyiauahuO
— ING Economics (@ING_Economics) November 6, 2024
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Good morning, and receive to our rolling coverage of business, the financial tagets and world economy.
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After yesterday’s election drama, monetary policy produces a receive return to the stage with interest rate decisions in the UK and US.
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The Bank of England is widely awaited to cut base rate today; from 5% to 4.75%.
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With CPI inflation and wage increaseth both continuing to chilly, the Bank should experience baged it can adequitable its redisconnecteive policy stance.
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To produce the decision, the BoE must weigh up the implications of last week’s UK budget, which lifted taxes, spfinishing and borroprosperg.
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But arrangeateors are baged that its Monetary Policy Committee will vote to drop rates – a quarter-point cut is a 95% probability, according to the tardyst money taget pricing.
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Ranjiv Mann, ageder mended income portfolio deal withr at AllianzGI, says:
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In the low term, although BOE regulateor Andrew Bailey showd recently that it may be too timely to proclaim triumph on the fight aachievest inflation donaten some worry about the stickiness of services inflation, we skinnyk that a presentantity of MPC members will still favour cutting rates in November.
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The BoE will also be pondering the outcome of the US election, and the implications of alters to US trade policy.
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As must the Federal Reserve! It is also awaited to cut borroprosperg costs by a quarter-point, when the US cental prohibitk’s policyproducers greets today.
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Donald Trump’s pro-increaseth policies, such as tax cuts and tariffs, are foreseeed to direct to higher inflation in the US, which ought to depart less room for interest rate cuts.
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Ipek Ozkardeskaya, ageder analyst at Swissquote Bank, says:
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The Federal Reserve is awaited to proclaim a 25bp cut today, but the policy beyond today’s decision must be readequitableed accordingly.
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The awaitation, so far, was that the Fed would cut today by 25bp, and transfer another 25bp cut in December, and a filled point cut next year. Now, the December cut is on a slick ground and the Fed should not ponder more than 2-3 rate cuts next year. That’s – at least – the policy response that you would reasonably await from a central prohibitk as an economist.
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The agfinisha
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8.30am GMT: Eurozone produceion PMI tell for October
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Noon GMT: Bank of England interest rate decision
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12.30pm GMT: Bank of England press conference
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1.30pm GMT: US weekly josanctify claims
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7pm GMT: Federal Reserve interest rate decision
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7.30pm GMT: Federal Reserve press conference
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Key events
Taiwan says will help firms depart China to shun Donald Trump tariffs
Taiwan will help companies transfer production from China to shun the menace of tariffs imposed by Donald Trump next year, its economy minister Kuo Jyh-huei shelp today.
Speaking in parliament, Kuo shelp the impact of any Trump tariffs on China for Taiwanese firms manufacturing there would be “quite big”, Reuters tells.
Kuo includeed:
“We will as soon as possible come up with help for Taiwan companies to transfer their production bases.”
Trump has menaceened to impose tariffs of 60% on US presents of Chinese excellents, which would menaceen increaseth at the world’s second-bigst economy.
Economics minister foresees Trump tariffs will hit Taiwanese companies in China challengingest https://t.co/zWtIfv28Ae
— Taiwan News (@TaiwanNewsEN) November 7, 2024
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Germany may not insist Donald Trump’s help to descfinish into an economic mess, though.
New data this morning shows that German industrial production fell by 2.5% month-on-month in September, and was almost 5% year-on-year.
Trade atraverse Europe’s bigst member also deteriorateed, with German ships descfinishing 1.7% in September. Imports were up 2.1% contrastd with August 2024, unkinding Germany’s trade surplus shrank.
ING say:
The zigzagging of German industrial data proposes that German industry has not yet accessed a period of filled bottoming out. In fact, industrial production in the third quarter was still some 2% down contrastd with the second quarter.
After some chunky sprospergs yesterday, tagets are sootheer today as arrangeateors digest the consequences of the US election.
Japan’s Nikkei has dipped by 0.25% today, having sencouraged by 2.6% on Wednesday to its highest shut in three weeks.
Japanese financial stocks have ascfinishn today, on awaitations that Trump’s fiscal policies will direct to higher inflation, and thus higher interest rates.
The produce (or interest rate) on Japan’s 10-year regulatement bonds rose to 1%, for the first time in over three months.
That trailed a acute selloff in US regulatement bonds yesterday, which pushed up US produces.
Jim Reid of Deutsche Bank elucidates:
That’s because the watch is that higher tariffs unkind that inflationary prescertains will ascfinish, and an extension of the Trump tax cuts under a Reaccessiblean sweep unkind the deficit will go up further in the years ahead. Plus the Fed are less foreseeed to cut rates in this scenario.
In fact, higher inflation awaitations were clear from how inflation swaps reacted, with the 2yr inflation swap surging by +18.6bps yesterday to 2.62%.
ECB’s de Guindos: Tariff menace includes to uncertainty hazards
Phillip Inman
Donald Trump’s election triumph and the menace of tariffs will force policyproducers to be more pimpolitent as they transport down interest rates, the European Central Bank’s vice plivent Luis de Guindos has shelp.
De Guindos shelp the heightened uncertainty folloprosperg Trump’s reapprehfinish of the White House unkindt the menace of trade tariffs could be includeed to the uncertainty produced by the war in Ukraine and the middle east dispute.
Speaking at University College London on Wednesday, he shelp the ECB was foreseeed to get “minuscule steps, low steps” in its approach to transporting down interest rates, scotching speculation of a cut in the cost of borroprosperg at the central prohibitk’s next greeting by 0.5 percentage points from 3.75%.
Some analysts had specutardyd that the ECB would transfer rapidly to bolster the eurozone economy ahead of menaceened tariff incrmitigates on European and Chinese excellents folloprosperg Trump’s inaguration in January.
“Uncertainty is on the ascfinish,” de Guindos shelp.
It is huge. And because of that you insist to be pdimiserablemirefulnt.
De Guindos, who was the first member of the ECB’s 26-strong regulateing council to reply to Trump’s electiion, shelp it will get time to appraise how trade policies under Trump will impact the economy.
“If you ask me, are you going to react instantly? — No,” he shelp.
What we will do is we will integrate into our projections the trade policy that is proclaimd by the novel US administration. And we will get into ponderation all the elements. Trade policy, plus the evolution of insist, plus the evolution of energy prices.
But he includeed: “Tariffs will impact increaseth pessimisticly and inflation pessimisticly.”
In the unkindtime he shelp policyproducers would persist to be directd by data and watch particularly shutly at its prohibitk lfinishing survey to remend whether firms are receiving the loans they insist to increase arrangeatement.
He shelp prohibitk lfinishing was feeding thcdimiserablemireful to the authentic economy folloprosperg two cuts in interest rates by the ECB, but inflation and economic increaseth had sluggished quicker than awaited.
He shelp it was clear from the US election that inflation had joined a key role.
It’s quite clear that inflation is a tax the low income people, because it’s quite clear that they use the big part of their incomes. And they use the comfervent of items where prices have been rising the most.
And even though you understand it’s clear that the inflation rate is declining, househageders and users, watch at prices that are 20% or 30% higher than two years ago.
Eurozone increaseth foresees cut due to tariff menace
Investors and economists are bracing for further economic pain in Europe from a second Donald Trump plivency that could direct to hefty tariffs on European ships into the US.
Berenberg prohibitk is cautioning this morning that Trump’s return to the White House implies “ponderable trade policy hazards and geopolitical uncertainty” for European businesses.
Germany – where the regulatement is on the brink of collapse folloprosperg the unawaitedly sacking of the finance minister yesterday – is particularly exposed.
Holger Schmieding, Berenberg’s chief economist, says:
We suppose that Trump will initipartner impose only pickive but headline-grabbing tariffs, while menaceening to go much further if China and Europe do not propose him meaningful concessions in negotiations. That would be akin to his approach in 2017-20.
Viewed in isolation, such an escalation of trade tensions could drop 2025 increaseth in the Eurozone by c0.3 percentage points and in heavily exposed Germany by as much as c0.5 percentage points as uncertainty weighs on business confidence and arrangeatement.
However, the eurozone should advantage from the “momentary spiladorer from more US domestic insist” and a stronger US dollar, which produces euro-priced excellents more competitive.
As a result, Berenberg has only trimmed its 2025 annual increaseth foresees modestly. Growth in the eurozone next year has been droped from 1.1% to 1.0%, for France from 0.8% to 0.7%, and for Italy from 0.9% to 0.8%.
Germany will foreseeed be hit challenginger, with increaseth of equitable 0.3% instead of 0.5% next year, it includes.
ING: Trump trade war could push the eurozone economy into decline.
A looming novel trade war triggered by Donald Trump could push the eurozone economy from sluggish increaseth into “a filled-blown decline”.
That’s the watch of the arrangeatement prohibitk ING, which worrys the decline could commence even before Trump – who has shelp he wants to impose a 10% tariff on all non-US excellents – is sworn in next January.
ING says:
The already struggling German economy, which heavily relies on trade with the US, would be particularly challenging hit by tariffs on European automotives. Additionpartner, uncertainty about Trump’s stance on Ukraine and NATO could undermine the recently stabilised economic confidence indicators atraverse the eurozone.
Even though tariffs might not impact Europe until tardy 2025, the renoveled uncertainty and trade war worrys could drive the eurozone economy into decline at the turn of the year.
ING also foresees that the European Central Bank will insist to do the “weighty lifting” of protecting Europe’s economy by cutting rates, while politicians paemploy to see what policies Trump actupartner carry outs.
It elucidates:
With these election results, a 50bp rate cut at the ECB’s December greeting has become more foreseeed, with awaitations of the deposit rate dropping to at least 1.75% by timely summer, possibly trailed by further easing towards the finish of 2025.
Even though Trump's tariffs might not impact Europe until tardy 2025, the renoveled uncertainty and trade war worrys could drive the eurozone economy into decline at the turn of the year.https://t.co/mPyiauahuO
— ING Economics (@ING_Economics) November 6, 2024
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Even though Trump’s tariffs might not impact Europe until tardy 2025, the renoveled uncertainty and trade war worrys could drive the eurozone economy into decline at the turn of the year.https://t.co/mPyiauahuO
— ING Economics (@ING_Economics) November 6, 2024
Introduction: Will UK and US cut interest rates today?
Good morning, and receive to our rolling coverage of business, the financial tagets and world economy.
After yesterday’s election drama, monetary policy produces a receive return to the stage with interest rate decisions in the UK and US.
The Bank of England is widely awaited to cut base rate today; from 5% to 4.75%.
With CPI inflation and wage increaseth both continuing to chilly, the Bank should experience baged it can adequitable its redisconnecteive policy stance.
To produce the decision, the BoE must weigh up the implications of last week’s UK budget, which lifted taxes, spfinishing and borroprosperg.
But arrangeateors are baged that its Monetary Policy Committee will vote to drop rates – a quarter-point cut is a 95% probability, according to the tardyst money taget pricing.
Ranjiv Mann, ageder mended income portfolio deal withr at AllianzGI, says:
In the low term, although BOE regulateor Andrew Bailey showd recently that it may be too timely to proclaim triumph on the fight aachievest inflation donaten some worry about the stickiness of services inflation, we skinnyk that a presentantity of MPC members will still favour cutting rates in November.
The BoE will also be pondering the outcome of the US election, and the implications of alters to US trade policy.
As must the Federal Reserve! It is also awaited to cut borroprosperg costs by a quarter-point, when the US cental prohibitk’s policyproducers greets today.
Donald Trump’s pro-increaseth policies, such as tax cuts and tariffs, are foreseeed to direct to higher inflation in the US, which ought to depart less room for interest rate cuts.
Ipek Ozkardeskaya, ageder analyst at Swissquote Bank, says:
The Federal Reserve is awaited to proclaim a 25bp cut today, but the policy beyond today’s decision must be readequitableed accordingly.
The awaitation, so far, was that the Fed would cut today by 25bp, and transfer another 25bp cut in December, and a filled point cut next year. Now, the December cut is on a slick ground and the Fed should not ponder more than 2-3 rate cuts next year. That’s – at least – the policy response that you would reasonably await from a central prohibitk as an economist.
The agfinisha
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8.30am GMT: Eurozone produceion PMI tell for October
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Noon GMT: Bank of England interest rate decision
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12.30pm GMT: Bank of England press conference
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1.30pm GMT: US weekly josanctify claims
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7pm GMT: Federal Reserve interest rate decision
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7.30pm GMT: Federal Reserve press conference
