- Injury-hit Australia thrash 'embarrassing' Pakistan at Women's T20 World Cup
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- New US coach Pochettino hails Pulisic but worries over workload
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- UK govt urged to raise pro-democracy tycoon's case with China
- Sculptor Lalanne's animal creations sell for $59 mn
- From Tesla to Trump: Behind Musk's giant leap into politics
- US, European markets rise as investors weigh rates, earnings
- In Colombia, children trade plastic waste for school supplies
- Supercharged hurricanes trigger 'perfect storm' for disinformation
- JPMorgan Chase profits top estimates, bank sees 'resilient' US economy
- Djokovic proves staying power as he progresses to Shanghai semi-finals
- Sheffield Utd boss Wilder 'numb' after Baldock death
- Little progress at key meet ahead of COP29 climate summit
- Fans immerse themselves in Marina Abramovic's first China exhibition
- Israel says conducting review after UN peacekeepers wounded in Lebanon
- 'Party atmosphere': Skygazers treated to another aurora show
- Djokovic 'overwhelmed' after 'greatest rival' Nadal's retirement
- Zelensky in Berlin says hopes war with Russia will end next year
- Kyrgyzstan opens rare probe into glacier destruction
- European Mediterranean states discuss Middle East, migration
- Djokovic proves staying power as progresses to Shanghai semi-finals
- Hurricane Milton leaves at least 16 dead as Florida cleans up
- Britain face 'ultimate challenge' in America's Cup duel with New Zealand
- Lebanon calls for 'immediate' ceasefire in Israel-Hezbollah war
- Nihon Hidankyo: Japan's A-bomb survivors awarded Nobel
- Thunberg leads pro-Palestinian, climate protest in Milan
- Boat captain rescued clinging to cooler in Gulf of Mexico after storm Milton
- Tears, warnings after Japan atomic survivors group win Nobel
- 'Unspeakable horror': the attacks on Hiroshima and Nagasaki
- Stock markets diverge before China weekend briefing
- Christian villagers 'trapped' in south Lebanon crossfire
- Sabalenka sets up Gauff showdown in Wuhan semis
- EU questions shopping app Temu over illegal products risk
- Kim Sei-young holds lead with late birdies at LPGA Shanghai
- Toulouse welcome Dupont 'boost' as Olympic star returns to Top 14
- Japanese atomic bomb survivor group Nihon Hidankyo wins Nobel Peace Prize
- Deadly Israeli strike on Beirut likely targeted Hezbollah security chief
- Bangladesh Islamist chief backs crimes against humanity trial for ex-PM
- Everest climber's remains believed found after 100 years
- 20 Pakistan coal miners shot dead in attack
- Clashes on South China Sea, Ukraine dominate Asia summit
- Han Kang's books sell out in South Korea after Nobel win
- Zelensky meets Pope, Scholz as whirlwind Europe tour ends
- Hello Hallyu: why is South Korean culture sweeping the globe?
- UK economy rebounds in August in boost to new govt
- Voice of Japan's beloved robot cat 'Doraemon' dies
- Shanghai markets sink ahead of briefing on mixed day for Asia
- Investors, analysts eye bigger China stimulus at Saturday briefing
Sticky inflation to keep eurozone interest rates on hold
Sticky inflation is expected to prompt eurozone rate-setters to hold borrowing costs steady again Thursday, as they await clearer signs of a sustained easing of consumer prices before beginning to cut.
Costs of everyday goods surged following Russia's invasion of Ukraine and amid pandemic-related supply chain woes, prompting the European Central Bank to launch a historic rate hiking cycle.
Inflation, which peaked at over 10 percent in late 2022, has been steadily easing, hitting 2.6 percent in February, heading towards the ECB's two-percent target.
At the same time the outlook is bleak, with the eurozone narrowly dodging a technical recession in the second half of 2023, weighed down by a poor performance in its biggest economy, Germany.
Slowing inflation and a worsening economy should bolster arguments for rate cuts. But consumer price rises are not slowing as quickly as hoped, and the ECB is worried about completing the "last mile" to reach its target.
The Frankfurt-based institution's governing council is widely expected to hold the benchmark deposit rate steady at a record four percent for a fourth straight meeting on Thursday.
"We don't think the ECB will be confident enough that the eurozone has gone far enough 'along the disinflation process'... even to discuss rate cuts, let alone signal that one is imminent," said HSBC in a note.
Still, the meeting will be closely watched for clues on when the ECB will start cutting borrowing costs, with most investors now betting on a first move in June.
Vital to their calculations will be the bank's updated forecasts due to be released alongside the rate decision, with a slight downward revision expected for this year's GDP growth as well as inflation.
- 'Next move is down' -
Analysts believe the drivers of inflation have shifted from energy costs, which surged after Russia invaded Ukraine in 2022, to inflation in the services sector and wage growth.
"Wage growth remains elevated with little sign of a rapid turnaround yet, fuelling the stickiness in services inflation," said Frederik Ducrozet, chief economist at Pictet Wealth Management.
Heightened geopolitical tensions in the Middle East have also added to worries that inflation could rebound.
Yemeni rebel attacks on Red Sea shipping have prompted shipping companies to avoid the vital trade route, while a spillover of the Israel-Hamas war could impact oil prices.
The US Federal Reserve, which holds its next rate-setting meeting on March 19-20, is also struggling with when to begin cutting rates, as a series of strong economic readings dim the prospects of early reductions.
For the ECB, there is little doubt that its next move will be a cut.
"There might be a hold, and hold, and a hold, and a hold, but the next move will be downward," ECB President Christine Lagarde said at the end of January.
Speculation had risen at the end of last year that a cut could come as soon as March, as inflation started dropping heavily.
But these expectations evaporated as price rises proved stubborn, with underlying inflation -- stripping out volatile energy and food costs -- in particular not coming down as fast as hoped.
While observers are now betting on a first cut in June, they expect the process to move slowly.
"We expect the ECB to ease monetary policy in a gradual fashion, cutting rates by a cumulative 100 (basis points) in 2024," said Ducrozet.
O.M.Souza--AMWN