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Relative large flows went through some of the major IMM currency pairs during a week that saw the broad-based Bloomberg Dollar index decline by 0.4%. Overall, the changes left the gross dollar long down for a fourth week to USD 18.8 billion, a 40% reduction since reaching a five-year high on 23 April. Traders bought 24,320 euros contract (USD 3.3 billion ...
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The aim of this speech is to examine inflation in the euro area. In the next section, I review the various inflation indicators tracked by the ECB. Subsequently, I discuss the implications for monetary policy. Chart 1 shows the evolution of headline and core inflation since 2019. Let me focus on the disinflation patterns since August 2023 (the month immediately prior to our last rate hike at our September monetary policy meeting). Inflation declined from 5.2 per cent last August to 2.4 percent in April, while core inflation decreased from 5.3 per cent in August to 2.7 per cent in April. Chart 2 shows the relative contributions of the major categories: energy; food; goods; and services. Services inflation now accounts for the vast bulk of the overall inflation rate. In turn, this reflects the non-uniform dynamics: while the other categories have seen major declines, with the April data indicating energy inflation running at -0.6 per cent, food inflation at 2.8 per cent and goods inflation at 0.9 per cent, services inflation was still elevated at 3.7 per cent. post: ECB'S LANE: JUNE RATE CUT APPROPRIATE IF INFLATION OULOOK HOLDS post: ECB’s Lane: Inflation Expected To 'Bounce Around The Current Level' Over The Coming Months post: ECB’S LANE: THE OVERALL MESSAGE ON WAGES IS BUMPY. THERE IS SOME DECELERATION, BUT IT IS FAIRLY SLOW.
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