The European Union's official statistics agency Eurostat said on Wednesday (March 2) that Eurozone inflation had soared to a record high in February. The inflation was at 5.8 per cent and energy prices surged.

The acceleration, from 5.1 percent in January, was announced as oil and gas prices rocketed even higher over fears about the impact on supplies from Russia's invasion of Ukraine.

Brent crude touched USD 110 a barrel for the first time since 2014. WTI followed suit hours later. It hit its highest level since 2013. European natural gas prices similarly hit a record level.

Also Read | <a href="https://www.wionews.com/world/russian-talkshows-describe-reports-of-military-losses-as-fake-458218">Russian talkshows describe reports of military losses as 'fake'</a>

The surge in inflation comes at a difficult time for European leaders as they warn their citizens of the "price to pay" from tough sanctions imposed on Russia, the EU's leading foreign gas supplier.

Policymakers fear soaring inflation could choke off the EU's recovery from the coronavirus pandemic.

Eurostat said energy prices in February jumped 31.7 percent, faster than the 28.8 percent recorded in January.

Food prices were up 4.1 percent in February, compared with 3.5 percent the previous month.

Analysts at Capital Economics predicted inflation would hit six percent in the coming months before falling back to around four percent, "most likely" at the end the year.

That is still double the European Central Bank's target of around two percent.

Capital Economics warned that not only energy prices, but also food prices could rise further due to the conflict in Ukraine, a major wheat exporter.

The EU and Western allies have imposed sweeping sanctions on Moscow over President Vladimir Putin's invasion.

They have unleashed turmoil on Russia's economy and forced the Kremlin to impose capital controls.

(With inputs from agencies)

The European Union's official statistics agency Eurostat said on Wednesday (March 2) that Eurozone inflation had soared to a record high in February. The inflation was at 5.

The European Union's official statistics agency Eurostat said on Wednesday (March 2) that Eurozone inflation had soared to a record high in February. The inflation was at 5.8 per cent and energy prices surged. The acceleration, from 5.1 percent in January, was announced as oil and gas prices rocketed even higher over fears about the impact on supplies from Russia's invasion of Ukraine. Brent crude touched USD 110 a barrel for the first time since 2014. WTI followed suit hours later. It hit its highest level since 2013. European natural gas prices similarly hit a record level. Also Read | Russian talkshows describe reports of military losses as 'fake' The surge in inflation comes at a difficult time for European leaders as they warn their citizens of the "price to pay" from tough sanctions imposed on Russia, the EU's leading foreign gas supplier. Policymakers fear soaring inflation could choke off the EU's recovery from the coronavirus pandemic. Eurostat said energy prices in February jumped 31.7 percent, faster than the 28.8 percent recorded in January. Food prices were up 4.1 percent in February, compared with 3.5 percent the previous month. Analysts at Capital Economics predicted inflation would hit six percent in the coming months before falling back to around four percent, "most likely" at the end the year. That is still double the European Central Bank's target of around two percent. Capital Economics warned that not only energy prices, but also food prices could rise further due to the conflict in Ukraine, a major wheat exporter. The EU and Western allies have imposed sweeping sanctions on Moscow over President Vladimir Putin's invasion. They have unleashed turmoil on Russia's economy and forced the Kremlin to impose capital controls. (With inputs from agencies)

Eurozone inflation hits record high due to soaring energy prices

Eurozone inflation accelerated to 3.4 per cent year-on-year in September, reaching a 13-year high, according to an estimate published by Eurostat, the statistical office of the European Union (EU).

Eurozone accelerated to 3.4 per cent, inflation hits 13-year high

Business activity in the&nbsp;eurozone&nbsp;shot ahead at its fastest rate in 21 years in July, a closely watched survey said on Friday, as the economy went into full throttle with loosened <a href="https://www.wionews.com/topics/coronavirus">COVID-19</a> restrictions.

But the survey showed that the spread of the <a href="https://www.wionews.com/world/delta-is-the-fastest-covid-19-variant-and-will-pick-off-the-most-vulnerable-who-393278">Delta variant </a>was beginning to chip away at business confidence, with concern that new measures could again sow chaos in the economy.&nbsp;

<div class="videoWrapper trancodeVideo"><iframe allowfullscreen="" autoplay="1" class="includeVideo" frameborder="0" height="350" src="https://www.wionews.com/videos/world-business-watch-eu-hikes-economic-recovery-forecast-as-downside-risks-emerge-396654/embed" style="width:100%;max-width:560px;" width="560"></iframe></div>

The PMI composite index from economic data group IHS Markit said activity rose from 59.5 in June to a strong 60.6 in July, well above the 50-point level that indicates growth.

With the summer in full swing, Chris Williamson, chief economist at IHS Markit, said that the tourism and hospitality sectors were especially responsible for pushing the economy to historic growth levels.

However, for manufacturers, supply chain delays remained a "major concern", hurting production and pushing costs higher.&nbsp;

This, he warned, would likely "feed through to higher consumer prices in coming months" and make itself felt in the inflation data.

Also read |&nbsp;<a href="https://www.wionews.com/world/eurozone-enters-double-dip-recession-in-first-quarter-381725">Eurozone enters double-dip recession in first quarter</a>

Pointing to a darker days ahead, Williamson said the delta variant posed "a major risk to the outlook".&nbsp;

"Not only have rising case numbers led to a slide in business optimism to the lowest since February, further covid waves around the world could lead to further global supply chain delays and hence ever higher prices."

Business activity in the eurozone shot ahead at its fastest rate in 21 years in July, a closely watched survey said on Friday, as the economy went into full throttle with loosened COVID-19 restrictions.

Business activity in the eurozone shot ahead at its fastest rate in 21 years in July, a closely watched survey said on Friday, as the economy went into full throttle with loosened COVID-19 restrictions. But the survey showed that the spread of the Delta variant was beginning to chip away at business confidence, with concern that new measures could again sow chaos in the economy. The PMI composite index from economic data group IHS Markit said activity rose from 59.5 in June to a strong 60.6 in July, well above the 50-point level that indicates growth. With the summer in full swing, Chris Williamson, chief economist at IHS Markit, said that the tourism and hospitality sectors were especially responsible for pushing the economy to historic growth levels. However, for manufacturers, supply chain delays remained a "major concern", hurting production and pushing costs higher. This, he warned, would likely "feed through to higher consumer prices in coming months" and make itself felt in the inflation data. Also read | Eurozone enters double-dip recession in first quarter Pointing to a darker days ahead, Williamson said the delta variant posed "a major risk to the outlook". "Not only have rising case numbers led to a slide in business optimism to the lowest since February, further covid waves around the world could lead to further global supply chain delays and hence ever higher prices."

Eurozone economy booms at fastest rate in 21 years

The eurozone fell into a double-dip recession in the first three months of the year as a third wave of Covid-19 took hold and countries struggled to roll out their vaccination programmes.

Eurozone plunges into double-dip recession

The&nbsp;eurozone&nbsp;economy fell into a second recession in less than&nbsp;a year in the first quarter, data showed on Friday, as slow vaccinations and pandemic lockdowns stopped a rebound.

The data was in stark contrast to the US, where the economy roared forward in the same period, posting annualised growth of 6.4 per cent.

China has also turned the corner from the <a href="https://www.wionews.com/search?q=Coronavirus">coronavirus pandemic</a> with an 18.3-per cent explosion in gross domestic product growth on an annual basis.

Also read |&nbsp;<a href="https://www.wionews.com/business-economy/recession-of-historic-proportions-eurozone-economy-predicted-to-contract-77-296990">'Recession of historic proportions': Eurozone economy predicted to contract 7.7%</a>

Europe has been hit hard by a second and third wave of the coronavirus pandemic, with multiple attempts to reopen the economy cut short by new outbreaks.

More recent data has given Europeans confidence that the recession will be short-lived, however, with surveys showing that manufacturing is now booming.

And with the vaccination campaign finally getting into swing, pent-up demand is expected to follow as Europeans begin to spend more in shops, at reopened restaurants and on tourism.

The EU's slow-moving recovery plan is also expected to finally get on track, giving a much-needed boost to southern countries crushed by the pandemic, such as Italy or Spain.

Germany was the major drag on growth in January to March period, with exports unable to overcome a steep drop in demand by discouraged consumers, analysts said.

The&nbsp;eurozone's consumer prices meanwhile rose in April by 1.6 per cent, moving closer to the European Central Bank's (ECB) target of two per cent.

The rise in prices, again largely fuelled by energy costs, came after five months of inflation in negative territory at the end of 2020 and a gradual turnaround earlier this year.

But core inflation, which strips out volatile components such as energy or food, actually dipped in April meaning demand is not yet fully recharging the economy.

Unemployment has largely been spared the worst ravages of the crisis that were initially feared when the pandemic froze the global economy in early 2020.

Eurostat said&nbsp;eurozone&nbsp;unemployment dipped to 8.1 per cent in March, though this was one percentage point more than a year before.

EU-wide, unemployment slipped to 7.3 per cent in March.

The eurozone economy fell into a second recession in less than a year in the first quarter, data showed on Friday, as slow vaccinations and pandemic lockdowns stopped a rebound.

The eurozone economy fell into a second recession in less than a year in the first quarter, data showed on Friday, as slow vaccinations and pandemic lockdowns stopped a rebound. The data was in stark contrast to the US, where the economy roared forward in the same period, posting annualised growth of 6.4 per cent. China has also turned the corner from the coronavirus pandemic with an 18.3-per cent explosion in gross domestic product growth on an annual basis. Also read | 'Recession of historic proportions': Eurozone economy predicted to contract 7.7% Europe has been hit hard by a second and third wave of the coronavirus pandemic, with multiple attempts to reopen the economy cut short by new outbreaks. More recent data has given Europeans confidence that the recession will be short-lived, however, with surveys showing that manufacturing is now booming. And with the vaccination campaign finally getting into swing, pent-up demand is expected to follow as Europeans begin to spend more in shops, at reopened restaurants and on tourism. The EU's slow-moving recovery plan is also expected to finally get on track, giving a much-needed boost to southern countries crushed by the pandemic, such as Italy or Spain. Germany was the major drag on growth in January to March period, with exports unable to overcome a steep drop in demand by discouraged consumers, analysts said. The eurozone's consumer prices meanwhile rose in April by 1.6 per cent, moving closer to the European Central Bank's (ECB) target of two per cent. The rise in prices, again largely fuelled by energy costs, came after five months of inflation in negative territory at the end of 2020 and a gradual turnaround earlier this year. But core inflation, which strips out volatile components such as energy or food, actually dipped in April meaning demand is not yet fully recharging the economy. Unemployment has largely been spared the worst ravages of the crisis that were initially feared when the pandemic froze the global economy in early 2020. Eurostat said eurozone unemployment dipped to 8.1 per cent in March, though this was one percentage point more than a year before. EU-wide, unemployment slipped to 7.3 per cent in March.

Eurozone enters double-dip recession in first quarter

Mario Draghi, former European Central Bank chief on Friday formally accepted Italy's prime ministerial post. He will now lead the government set to&nbsp;replace Giuseppe Conte's centre-left coalition that collapsed a month ago. Draghi, the 73-year-old economist, spoke with Italy President Sergio Mattarella and spoke only to list the names of his ministers, a mix of politicians and technocrats. Draghi will return to the presidential palace at midday on Saturday to be formally sworn in, a spokesman for Mattarella said.

The senior deputy governor of Bank of Italy, Daniele Franco, was named as the new economy minister, while Roberto Speranza and Luigi Di Maio stay on at health and foreign affairs, respectively.

Draghi will take the reins when Italy has not fully recovered from the blow of coronavirus pandemic.

More than 93,000 people with coronavirus have died in Italy since it became the first European country to face the full force of the pandemic one year ago, and the toll is still rising by the hundreds each day.

Also Read | <a href="https://www.wionews.com/world/eu-to-spare-turkey-from-tax-blacklist-sources-say-363228">EU to spare Turkey from tax blacklist, sources say</a>

Shutdowns and coronavirus restrictions have plunged Italy, eurozone's third-largest economy into its worst recession since second world war. More than 420,000 people have lost their jobs.

Coalition, for now?

President Sergio Mattarella asked Draghi to form a new government on February 3, and the respected economist has spent the last nine days assembling the widest possible majority in parliament.

Almost all the main parties are behind him, from leftists to Matteo Salvini's far-right League, and including the populist Five Star Movement (M5S), the centre-left Democratic Party (PD) and Italia Viva, who shared power before.

Draghi was expected to present a list of ministers to Mattarella, before being formally sworn in on Saturday.

M5S, the biggest party in parliament which began life as an anti-establishment movement, was split over whether to support a government led by an unelected technocrat.

But in an online vote, members backed Draghi by 59 per cent, after it claimed to have secured the promise to set up a new super-ministry for "ecological transition".

Uphill challenges

Italy has high hopes for its new leader, dubbed "Super Mario" after vowing to do "whatever it takes" to save the euro single currency during the 2010s debt crisis.&nbsp;

His arrival was greeted with delight by the financial markets, and Italy's borrowing costs dropped to a historic low this week.

But "it is difficult to overstate the scale of the challenges that Draghi and Italy face", said Luigi Scazzieri, of the Centre for European Reform.

The economy shrank by a staggering 8.9 per cent last year, while Covid-19 remains rife and restrictions including a night curfew and the closure of bars and restaurants in the evening remain in place.

(With AFP inputs)

Mario Draghi, former European Central Bank chief on Friday formally accepted Italy's prime ministerial post. He will now lead the government set to replace Giuseppe Conte's centre-left coalition that collapsed a month ago.

Mario Draghi, former European Central Bank chief on Friday formally accepted Italy's prime ministerial post. He will now lead the government set to replace Giuseppe Conte's centre-left coalition that collapsed a month ago. Draghi, the 73-year-old economist, spoke with Italy President Sergio Mattarella and spoke only to list the names of his ministers, a mix of politicians and technocrats. Draghi will return to the presidential palace at midday on Saturday to be formally sworn in, a spokesman for Mattarella said. The senior deputy governor of Bank of Italy, Daniele Franco, was named as the new economy minister, while Roberto Speranza and Luigi Di Maio stay on at health and foreign affairs, respectively. Draghi will take the reins when Italy has not fully recovered from the blow of coronavirus pandemic. More than 93,000 people with coronavirus have died in Italy since it became the first European country to face the full force of the pandemic one year ago, and the toll is still rising by the hundreds each day. Also Read | EU to spare Turkey from tax blacklist, sources say Shutdowns and coronavirus restrictions have plunged Italy, eurozone's third-largest economy into its worst recession since second world war. More than 420,000 people have lost their jobs. Coalition, for now? President Sergio Mattarella asked Draghi to form a new government on February 3, and the respected economist has spent the last nine days assembling the widest possible majority in parliament. Almost all the main parties are behind him, from leftists to Matteo Salvini's far-right League, and including the populist Five Star Movement (M5S), the centre-left Democratic Party (PD) and Italia Viva, who shared power before. Draghi was expected to present a list of ministers to Mattarella, before being formally sworn in on Saturday. M5S, the biggest party in parliament which began life as an anti-establishment movement, was split over whether to support a government led by an unelected technocrat. But in an online vote, members backed Draghi by 59 per cent, after it claimed to have secured the promise to set up a new super-ministry for "ecological transition". Uphill challenges Italy has high hopes for its new leader, dubbed "Super Mario" after vowing to do "whatever it takes" to save the euro single currency during the 2010s debt crisis. His arrival was greeted with delight by the financial markets, and Italy's borrowing costs dropped to a historic low this week. But "it is difficult to overstate the scale of the challenges that Draghi and Italy face", said Luigi Scazzieri, of the Centre for European Reform. The economy shrank by a staggering 8.9 per cent last year, while Covid-19 remains rife and restrictions including a night curfew and the closure of bars and restaurants in the evening remain in place. (With AFP inputs)

Mario Draghi formally accepts Italy's prime ministerial post

The resurgence in coronavirus cases is the biggest threat to the recovering eurozone economy. Growth and inflation are more likely to create negative surprises over the coming year than positive ones.

Resurging cases of COVID-19 pose big challenge to Euro Zone economy

A slowdown in economic growth in the eurozone since last year may be sharper than expected, but that does not necessarily mean a recession is looming, Klaus Regling, head of the euro zone's bailout fund, said on Tuesday.

"We are in a phase of slowdown but not of recession," Regling told a conference in Nicosia.

The euro zone's gross domestic product expanded by 0.2 per cent&nbsp;in the second quarter, after a 0.4 per cent&nbsp;expansion in the first three months of the year, Eurostat data in September showed.

It confirms a gloomy outlook for the 19-nation currency bloc which is facing twin threats and uncertainty from Brexit and global trade wars.

Regling, who heads the European Stability Mechanism, an organisation which offers aid to faltering euro area economies, said the eurozone had strong economic fundamentals and that growth was close to potential.

"We have to remember that not every cyclical slowdown leads to a recession, and not every recession implies another crisis," Regling said.

"It is important to look at the underlying dynamics. This slowdown in growth relates mainly to external factors, while domestic demand remains resilient."

He said the single currency area was better equipped now to deal with any future crises than it was a decade ago, but that more could be done to strengthen its financial architecture.

Common deposit insurance, a fiscal capacity for macroeconomic stabilisation,&nbsp;what he described as a key element missing in the architecture of the eurozone,&nbsp;and the need to create a European 'safe asset' should be discussed, Regling said.

A slowdown in economic growth in the eurozone since last year may be sharper than expected, but that does not necessarily mean a recession is looming, Klaus Regling, head of the euro zone's bailout fund, said on Tuesday.

A slowdown in economic growth in the eurozone since last year may be sharper than expected, but that does not necessarily mean a recession is looming, Klaus Regling, head of the euro zone's bailout fund, said on Tuesday. "We are in a phase of slowdown but not of recession," Regling told a conference in Nicosia. The euro zone's gross domestic product expanded by 0.2 per cent in the second quarter, after a 0.4 per cent expansion in the first three months of the year, Eurostat data in September showed. It confirms a gloomy outlook for the 19-nation currency bloc which is facing twin threats and uncertainty from Brexit and global trade wars. Regling, who heads the European Stability Mechanism, an organisation which offers aid to faltering euro area economies, said the eurozone had strong economic fundamentals and that growth was close to potential. "We have to remember that not every cyclical slowdown leads to a recession, and not every recession implies another crisis," Regling said. "It is important to look at the underlying dynamics. This slowdown in growth relates mainly to external factors, while domestic demand remains resilient." He said the single currency area was better equipped now to deal with any future crises than it was a decade ago, but that more could be done to strengthen its financial architecture. Common deposit insurance, a fiscal capacity for macroeconomic stabilisation, what he described as a key element missing in the architecture of the eurozone, and the need to create a European 'safe asset' should be discussed, Regling said.

Eurozone slowdown doesn't mean recession: ESM's Regling

Companies' demand for bank loans held up in the eurozone in the third quarter, the European Central Bank found in a survey published Tuesday, in a mildly positive sign amid fears of a slowdown.

"Net demand for loans to enterprises remained broadly unchanged in the third quarter," the ECB said in its quarterly survey of 144 banks across the single currency area.

But the steady interest in loans disappointed financial firms' hopes earlier this year that the third quarter would bring growth in demand.

"Demand slightly increased for loans to small- and medium-sized enterprises, but decreased for loans to large firms," the ECB added.

Many of the central bank's measures to stimulate the economy in recent years have aimed at increasing bank lending, a more significant factor for growth in Europe than other advanced economies like the US.

But the Frankfurt institution and organisations like the International Monetary Fund were forced to slash eurozone growth forecasts in recent weeks, as external factors such as trade wars and Brexit weigh on the bloc.

ECB economists now expect an expansion of 1.1 per cent this year and 1.2 per cent in 2020.

It was unclear Tuesday whether British MPs would vote through a last-minute divorce deal with the European Union.

And a truce in the US' damaging trade conflict with China remains elusive, while Washington last week slapped new tariffs on $7.5 billion of EU imports.

The ECB in September responded to slowing growth and mounting risks with a fresh and controversial big-bang package of measures.

It relaunched mass bond-buying and further lowered a key interest rate into negative territory.

Even before then, banks reported in the third-quarter survey that "the ECB's negative deposit facility rate continued to contribute to an increase in lending volumes and a decrease in lending rates" for companies and households.

Looking elsewhere in the results, lenders said they eased slightly the criteria they use to evaluate potential home mortgage and business borrowers in July-September.

But they tightened up the terms and conditions in their loan contracts for both companies and home buyers over the same period.

Companies' demand for bank loans held up in the eurozone in the third quarter, the European Central Bank found in a survey published Tuesday, in a mildly positive sign amid fears of a slowdown.

Companies' demand for bank loans held up in the eurozone in the third quarter, the European Central Bank found in a survey published Tuesday, in a mildly positive sign amid fears of a slowdown. "Net demand for loans to enterprises remained broadly unchanged in the third quarter," the ECB said in its quarterly survey of 144 banks across the single currency area. But the steady interest in loans disappointed financial firms' hopes earlier this year that the third quarter would bring growth in demand. "Demand slightly increased for loans to small- and medium-sized enterprises, but decreased for loans to large firms," the ECB added. Many of the central bank's measures to stimulate the economy in recent years have aimed at increasing bank lending, a more significant factor for growth in Europe than other advanced economies like the US. But the Frankfurt institution and organisations like the International Monetary Fund were forced to slash eurozone growth forecasts in recent weeks, as external factors such as trade wars and Brexit weigh on the bloc. ECB economists now expect an expansion of 1.1 per cent this year and 1.2 per cent in 2020. It was unclear Tuesday whether British MPs would vote through a last-minute divorce deal with the European Union. And a truce in the US' damaging trade conflict with China remains elusive, while Washington last week slapped new tariffs on $7.5 billion of EU imports. The ECB in September responded to slowing growth and mounting risks with a fresh and controversial big-bang package of measures. It relaunched mass bond-buying and further lowered a key interest rate into negative territory. Even before then, banks reported in the third-quarter survey that "the ECB's negative deposit facility rate continued to contribute to an increase in lending volumes and a decrease in lending rates" for companies and households. Looking elsewhere in the results, lenders said they eased slightly the criteria they use to evaluate potential home mortgage and business borrowers in July-September. But they tightened up the terms and conditions in their loan contracts for both companies and home buyers over the same period.

Eurozone firms keep borrowing as growth fears mount

Eurozone inflation slowed in September by more than previously estimated to its slowest pace in nearly three years, the European Union statistics agency said on Wednesday, in a new warning on the state of the bloc's economy.

Eurostat said prices in the 19-country currency area grew by 0.8 per cent&nbsp;on the year, revising down its earlier estimate of a 0.9 per cent&nbsp;rate. That also defied the market consensus of a 0.9 per cent&nbsp;growth.

In a separate release, Eurostat said on Wednesday that the bloc's trade surplus with the rest of the world rose to $16.2 billion&nbsp;in August, from 11.9 billion the previous year, as euro zone's imports dropped more than its declining exports.

The revised inflation reading marked a more pronounced slowdown from the 1.0 per cent&nbsp;growth in August and was the lowest rate since November 2016 when prices grew by 0.6 per cent&nbsp;in the bloc.

The new drop is likely to raise new concerns on the state of the eurozone economy and could reignite the debate within the European Central Bank on how to pursue its goal of keeping inflation below, but close to 2 per cent&nbsp;over the medium term.

The revision was due to lower-than-expected inflation for industrial products, in a fresh worrying sign for the bloc's manufacturing sector which faces drops in output and a fall in confidence.

Prices for industrial goods, excluding energy, went up by a mere 0.2 per cent&nbsp;on the year in September, Eurostat said, revising its earlier estimate of a 0.3 per cent&nbsp;increase.

Energy prices were confirmed falling by 1.8 per cent, while inflation in the service sector, the largest in the bloc, rose by 1.5 per cent&nbsp;in line with previous estimates.

A narrower inflation indicator which strips out volatile energy and unprocessed food prices, and is monitored closely by the ECB for its policy decisions, rose to 1.2 per cent&nbsp;in September from 1.1 per cent&nbsp;in August, in line with Eurostat's earlier estimates released on October&nbsp;1.

Excluding energy, food, alcohol and tobacco, inflation grew 1.0 per cent&nbsp;in September, Eurostat said, confirming its previous figures.

On the month, headline inflation grew 0.2 per cent&nbsp;in the bloc, also in line with earlier estimates.

Eurozone inflation slowed in September by more than previously estimated to its slowest pace in nearly three years, the European Union statistics agency said on Wednesday, in a new warning on the state of the bloc's economy.

Eurozone inflation slowed in September by more than previously estimated to its slowest pace in nearly three years, the European Union statistics agency said on Wednesday, in a new warning on the state of the bloc's economy. Eurostat said prices in the 19-country currency area grew by 0.8 per cent on the year, revising down its earlier estimate of a 0.9 per cent rate. That also defied the market consensus of a 0.9 per cent growth. In a separate release, Eurostat said on Wednesday that the bloc's trade surplus with the rest of the world rose to $16.2 billion in August, from 11.9 billion the previous year, as euro zone's imports dropped more than its declining exports. The revised inflation reading marked a more pronounced slowdown from the 1.0 per cent growth in August and was the lowest rate since November 2016 when prices grew by 0.6 per cent in the bloc. The new drop is likely to raise new concerns on the state of the eurozone economy and could reignite the debate within the European Central Bank on how to pursue its goal of keeping inflation below, but close to 2 per cent over the medium term. The revision was due to lower-than-expected inflation for industrial products, in a fresh worrying sign for the bloc's manufacturing sector which faces drops in output and a fall in confidence. Prices for industrial goods, excluding energy, went up by a mere 0.2 per cent on the year in September, Eurostat said, revising its earlier estimate of a 0.3 per cent increase. Energy prices were confirmed falling by 1.8 per cent, while inflation in the service sector, the largest in the bloc, rose by 1.5 per cent in line with previous estimates. A narrower inflation indicator which strips out volatile energy and unprocessed food prices, and is monitored closely by the ECB for its policy decisions, rose to 1.2 per cent in September from 1.1 per cent in August, in line with Eurostat's earlier estimates released on October 1. Excluding energy, food, alcohol and tobacco, inflation grew 1.0 per cent in September, Eurostat said, confirming its previous figures. On the month, headline inflation grew 0.2 per cent in the bloc, also in line with earlier estimates.

Eurozone September inflation unexpectedly revised down to 0.8%

Eurozone inflation slowed in September to near a three-year low because of cheaper energy although core inflation edged higher, highlighting the challenges facing the European Central Bank.

The divergence between the headline and core figures underlines the split of opinion over the state of the eurozone economy among the governors of the ECB. It wants to keep inflation below, but close to 2 per cent over the medium term but has so far failed to boost price growth despite years of unconventional steps.

Eurostat said on Tuesday that consumer prices in the 19 countries sharing the euro rose 0.2 per cent month-on-month in September for a 0.9 per cent year-on-year gain. Economists polled by Reuters had expected an unchanged reading of 1.0 per cent.

The weaker than expected September number, the lowest year-on-year figure since November 2016, was mainly due to a 1.8 per cent year-on-year fall in energy prices.

Excluding energy and equally volatile unprocessed food, price growth accelerated to 1.2 per cent in September from 1.1 per cent in August. This number is called core inflation by the ECB which it monitors for monetary policy decisions,

An even more narrowly defined core inflation measure, which excludes energy, food, alcohol, and tobacco and looked at by many market economists, also accelerated to 1.0 per cent from 0.9 per cent year-on-year.

"It should continue to rise slightly in the coming months. However, the strong increase in underlying inflation hoped for by the ECB is still not in sight," said Christoph Weil, economist at Commerzbank.

The ECB decided on September 12 to resume asset purchases to inject more money into the slowing economy and in this way make prices grow more quickly.

But the decision was opposed by a third of ECB policymakers, including Germany's Sabine Lautenschlaeger who resigned before the end of her term last week.

ECB chief economist Philip Lane said last week the division was due to "ambiguity" over the state of the eurozone economy among ECB governors.

"We expect the central bank to take time to assess the impact of last month's easing package before taking further action," a team of Morgan Stanley economists said in a note.

They saw only a minimal boost to the economy even once quantitative easing restarted in November, with inflation remaining subdued. There were also a variety of downside risks to growth.

"With fiscal policy remaining reactive for now, we expect the ECB to take further action. Our base case is for another 10 bp cut in March, though the timing remains rather uncertain at this stage," the Morgan Stanley note said.

Eurozone inflation slowed in September to near a three-year low because of cheaper energy although core inflation edged higher, highlighting the challenges facing the European Central Bank.

Eurozone inflation slowed in September to near a three-year low because of cheaper energy although core inflation edged higher, highlighting the challenges facing the European Central Bank. The divergence between the headline and core figures underlines the split of opinion over the state of the eurozone economy among the governors of the ECB. It wants to keep inflation below, but close to 2 per cent over the medium term but has so far failed to boost price growth despite years of unconventional steps. Eurostat said on Tuesday that consumer prices in the 19 countries sharing the euro rose 0.2 per cent month-on-month in September for a 0.9 per cent year-on-year gain. Economists polled by Reuters had expected an unchanged reading of 1.0 per cent. The weaker than expected September number, the lowest year-on-year figure since November 2016, was mainly due to a 1.8 per cent year-on-year fall in energy prices. Excluding energy and equally volatile unprocessed food, price growth accelerated to 1.2 per cent in September from 1.1 per cent in August. This number is called core inflation by the ECB which it monitors for monetary policy decisions, An even more narrowly defined core inflation measure, which excludes energy, food, alcohol, and tobacco and looked at by many market economists, also accelerated to 1.0 per cent from 0.9 per cent year-on-year. "It should continue to rise slightly in the coming months. However, the strong increase in underlying inflation hoped for by the ECB is still not in sight," said Christoph Weil, economist at Commerzbank. The ECB decided on September 12 to resume asset purchases to inject more money into the slowing economy and in this way make prices grow more quickly. But the decision was opposed by a third of ECB policymakers, including Germany's Sabine Lautenschlaeger who resigned before the end of her term last week. ECB chief economist Philip Lane said last week the division was due to "ambiguity" over the state of the eurozone economy among ECB governors. "We expect the central bank to take time to assess the impact of last month's easing package before taking further action," a team of Morgan Stanley economists said in a note. They saw only a minimal boost to the economy even once quantitative easing restarted in November, with inflation remaining subdued. There were also a variety of downside risks to growth. "With fiscal policy remaining reactive for now, we expect the ECB to take further action. Our base case is for another 10 bp cut in March, though the timing remains rather uncertain at this stage," the Morgan Stanley note said.

Euro zone inflation slows to three-year low on cheaper energy

The dollar charged to its highest in more than two years on Thursday after the <a href="https://www.google.com/url?client=internal-uds-cse&amp;cx=006054055338965708568:09spwrlibei&amp;q=https://www.wionews.com/business-economy/stormy-sterling-sinks-again-stocks-wilt-before-fed-239448&amp;sa=U&amp;ved=2ahUKEwjO-ZbLuOHjAhUBr48KHSApDvgQFjAFegQIBBAC&amp;usg=AOvVaw3Y8jTTDaVY7qnK939Bej7w">Federal Reserve</a> spoiled hopes of a run of US interest rate cuts.

A blizzard of global data and events was going on, but it was Fed Chair Jerome Powell's remarks on Wednesday that set the markets running. Powell said the first US rate cut in over a decade was "not the beginning of a long series of rate cuts".

The dollar’s reaction said it all. The DXY index surged to its highest in more than two years, euro/dollar dropped below $1.11 for the first time since May 2017, and Brexit-hobbled sterling hit 30-month lows just above $1.21.

World stocks had recoiled overnight and emerging markets had their longest run of falls in almost a year.

"Markets interpreted the Fed’s communication as slightly hawkish and therefore further rate cuts in the immediate future were somewhat priced out," said David Milleker, senior economic advisor at Union Investment. "And the dollar strengthened. All in all, the Fed did not achieve what it presumably wanted."

US Treasuries were sold off as investors scaled back their pre-Fed expectations for at least 100 basis points of cuts in the near term. Yields on 10-year notes climbed as high as 2.058% in Europe from a US close of 2.007%.

WATCH VIDEO

<div class="ui-state-default" contenteditable="false">
<div class="twitter-block" draggable="false">
<div class="videoWrapper trancodeVideo"><iframe allowfullscreen="" autoplay="1" class="includeVideo" frameborder="0" height="350" src="https://www.wionews.com/videos/dramatic-shift-in-federal-reserve-monetary-policy-239838/embed" style="width:100%;max-width:560px;" width="560"></iframe></div>
</div>
<a class="close-mark close-div" href="#" id="jqclosemark">×</a></div>

Core eurozone bond yields were rising, too, although -0.428% German Bund levels were still extraordinary. "I didn’t say it’s just one rate cut," Powell had been careful to emphasise after Wednesday's 25-basis-point move.

Instead, he characterised it as "a mid-cycle adjustment to policy", citing signs of a global slowdown, US trade tensions and a desire to boost inflation.

Wall Street fell afterwards and E-minis futures for the S&amp;P 500 were pointing 0.15% lower.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.8%, extending losses for a fifth day to the lowest since mid-June and posting its biggest one-day percentage drop in a month.

Japan's Nikkei rose, reversing early declines. Australian shares declined 0.4%. Losses by Chinese shares ended down 0.8%.

"We believe the Fed is trying to thread the needle, balancing market jitters about slowing global growth with robust consumer spending and a strong job market in the US," said Nick Maroutsos, co-head of global bonds at Janus Henderson.

"In other words, by cutting just 25 bps, the Fed is trying to bolster market confidence while also keeping some dry powder in reserve in case of an economic shock."

Trade Talks

Adding to worries, the United States and China on Wednesday ended a brief round of talks without much progress in ending their year-long trade war.

Downbeat data and factory surveys on Thursday had also pointed to further weakness for Asia's trade-reliant economies.

South Korea's exports fell for an eighth straight month in July amid weak global demand and a dispute with Japan. New export orders shrank the most in about six years.

South Korea, the world's sixth-largest exporter, is the first major industrial economy to release trade data each month, providing an early assessment on the health of global demand.

Pressure on Chinese factories eased slightly, but manufacturing activity continued to shrink.

"The broader global trade dynamic remains a challenge," Morgan Stanley strategist Michael Zezas said. "Trade should continue to drag on corporate confidence, CapEx and global growth in the near term."

In Europe's foreign exchange markets, sterling dropped as low as $1.2101 before a Bank of England meeting that's expected to leave its 0.75% interest rate unchanged but result in plenty of interesting discussions.

Fears of a <a href="https://www.google.com/url?client=internal-uds-cse&amp;cx=006054055338965708568:09spwrlibei&amp;q=https://www.wionews.com/world/britain-to-spend-an-extra-26-billion-on-no-deal-brexit-planning-239860&amp;sa=U&amp;ved=2ahUKEwjd24uDu-HjAhUW8XMBHSfID2IQFjAAegQIBhAC&amp;usg=AOvVaw05e85f7pwO51L5lCnpMiS3">no-deal Brexit</a> now that Boris Johnson is prime minister continue to afflict the pound, although it was fractionally higher against a weakening euro at 91.17 pence.

"Sterling remains vulnerable to a further escalation in Brexit tensions and we anticipate the market will likely discount higher risks of a ‘no deal’ outcome in the weeks ahead," said Roger Hallam, currency chief investment officer at JP Morgan Asset Management.

Elsewhere, the Aussie dollar slipped below key chart support of $0.6832 to as low as $0.6828, a level not seen since an early January "flash crash".

The kiwi hit a six-week trough of $0.6535 on expectations the Reserve Bank of New Zealand will cut rates next week.

US crude futures fell 76 cents to $57.82 per barrel after comments on the rating outlook. Brent was down 71 cents at $64.34.

Spot gold also fell, to $1,405.26.

The dollar charged to its highest in more than two years on Thursday after the Federal Reserve spoiled hopes of a run of US interest rate cuts. A blizzard of global data and events was going on, but it was Fed Chair Jerome Powell's remarks on Wednesday that set the markets running.

The dollar charged to its highest in more than two years on Thursday after the Federal Reserve spoiled hopes of a run of US interest rate cuts. A blizzard of global data and events was going on, but it was Fed Chair Jerome Powell's remarks on Wednesday that set the markets running. Powell said the first US rate cut in over a decade was "not the beginning of a long series of rate cuts". The dollar’s reaction said it all. The DXY index surged to its highest in more than two years, euro/dollar dropped below $1.11 for the first time since May 2017, and Brexit-hobbled sterling hit 30-month lows just above $1.21. World stocks had recoiled overnight and emerging markets had their longest run of falls in almost a year. "Markets interpreted the Fed’s communication as slightly hawkish and therefore further rate cuts in the immediate future were somewhat priced out," said David Milleker, senior economic advisor at Union Investment. "And the dollar strengthened. All in all, the Fed did not achieve what it presumably wanted." US Treasuries were sold off as investors scaled back their pre-Fed expectations for at least 100 basis points of cuts in the near term. Yields on 10-year notes climbed as high as 2.058% in Europe from a US close of 2.007%. WATCH VIDEO × Core eurozone bond yields were rising, too, although -0.428% German Bund levels were still extraordinary. "I didn’t say it’s just one rate cut," Powell had been careful to emphasise after Wednesday's 25-basis-point move. Instead, he characterised it as "a mid-cycle adjustment to policy", citing signs of a global slowdown, US trade tensions and a desire to boost inflation. Wall Street fell afterwards and E-minis futures for the S&P 500 were pointing 0.15% lower. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.8%, extending losses for a fifth day to the lowest since mid-June and posting its biggest one-day percentage drop in a month. Japan's Nikkei rose, reversing early declines. Australian shares declined 0.4%. Losses by Chinese shares ended down 0.8%. "We believe the Fed is trying to thread the needle, balancing market jitters about slowing global growth with robust consumer spending and a strong job market in the US," said Nick Maroutsos, co-head of global bonds at Janus Henderson. "In other words, by cutting just 25 bps, the Fed is trying to bolster market confidence while also keeping some dry powder in reserve in case of an economic shock." Trade Talks Adding to worries, the United States and China on Wednesday ended a brief round of talks without much progress in ending their year-long trade war. Downbeat data and factory surveys on Thursday had also pointed to further weakness for Asia's trade-reliant economies. South Korea's exports fell for an eighth straight month in July amid weak global demand and a dispute with Japan. New export orders shrank the most in about six years. South Korea, the world's sixth-largest exporter, is the first major industrial economy to release trade data each month, providing an early assessment on the health of global demand. Pressure on Chinese factories eased slightly, but manufacturing activity continued to shrink. "The broader global trade dynamic remains a challenge," Morgan Stanley strategist Michael Zezas said. "Trade should continue to drag on corporate confidence, CapEx and global growth in the near term." In Europe's foreign exchange markets, sterling dropped as low as $1.2101 before a Bank of England meeting that's expected to leave its 0.75% interest rate unchanged but result in plenty of interesting discussions. Fears of a no-deal Brexit now that Boris Johnson is prime minister continue to afflict the pound, although it was fractionally higher against a weakening euro at 91.17 pence. "Sterling remains vulnerable to a further escalation in Brexit tensions and we anticipate the market will likely discount higher risks of a ‘no deal’ outcome in the weeks ahead," said Roger Hallam, currency chief investment officer at JP Morgan Asset Management. Elsewhere, the Aussie dollar slipped below key chart support of $0.6832 to as low as $0.6828, a level not seen since an early January "flash crash". The kiwi hit a six-week trough of $0.6535 on expectations the Reserve Bank of New Zealand will cut rates next week. US crude futures fell 76 cents to $57.82 per barrel after comments on the rating outlook. Brent was down 71 cents at $64.34. Spot gold also fell, to $1,405.26.

Mind your backs, dollar coming through!

Economic growth in the eurozone slowed to 0.2 per cent in the second quarter of the year, down from 0.4 per cent in the previous three months.&nbsp;

Eurostat's figures, published Wednesday, also showed inflation in the 19-nation single currency group dropping from 1.3 per cent in June to 1.1 in July.

This falls even further short of the European Central bank's 2.0 per cent target for a healthy economy and amounts to further evidence of a worrying slowdown.&nbsp;

The seasonally adjusted unemployment rate nevertheless also fell, from a revised 7.6 per cent in May to 7.5 in June, its lowest level in ten years.

The wider 28-member European Union, which includes countries outside the euro, also saw second-quarter growth shrink to 0.2 per cent, down from 0.5 in the previous period.

All these figures were in line with market expectations as estimated by data firm Factset.

Economic growth in the eurozone slowed to 0.2 per cent in the second quarter of the year, down from 0.4 per cent in the previous three months. Eurostat's figures, published Wednesday, also showed inflation in the 19-nation single currency group dropping from 1.

Economic growth in the eurozone slowed to 0.2 per cent in the second quarter of the year, down from 0.4 per cent in the previous three months. Eurostat's figures, published Wednesday, also showed inflation in the 19-nation single currency group dropping from 1.3 per cent in June to 1.1 in July. This falls even further short of the European Central bank's 2.0 per cent target for a healthy economy and amounts to further evidence of a worrying slowdown. The seasonally adjusted unemployment rate nevertheless also fell, from a revised 7.6 per cent in May to 7.5 in June, its lowest level in ten years. The wider 28-member European Union, which includes countries outside the euro, also saw second-quarter growth shrink to 0.2 per cent, down from 0.5 in the previous period. All these figures were in line with market expectations as estimated by data firm Factset.

Eurozone growth slows to 0.2% in second quarter

Global shares slipped on Thursday on growing signs that a trade dispute between the United States and China was taking a toll on corporate earnings, with nerves spreading from Wall Street through Asia to European markets.

MSCI world equity index, which tracks shares in 47 countries, fell 0.2% to its lowest in nine days, while the Euro STOXX 600 slipped 0.5% to its lowest in almost three weeks.

The earnings season, kicking off this week brought bad signs as rail freight giant CSX Corp, cut its revenue forecast as it warned of the impact of the US-China trade war, pushing down Wall Street indexes on Wednesday.

In Europe, too, earnings were top of the agenda. Tech stocks led the slide as software firm SAP, Europe's most valuable tech stock by market cap, reported poor results, also flagging the impact of the US-China trade war.

With nerves already on edge over when face-to-face talks between the United States and China will resume, US President Donald Trump on Tuesday maintained pressure on Beijing with a threat to put tariffs on another $325 billion of Chinese goods.

Investors also cited a report that progress toward a US-China trade deal has stalled as the Trump administration works out how to address Beijing's demands that it ease restrictions on Huawei Technologies.

"It's still about the US and China dispute," Christophe Barraud, chief economist and strategist at Market Securities. "The trade war is creating uncertainty, weighed on capEx, and clearly on trade flows."

"There are also problems with guidance, especially in the transportation sector. The fact is that one of the key stories of this year is global trade flows contraction," he said.

Adding to the concerns over corporate health, Netflix shed US subscribers for the first time in 8 years, sending shares falling over 10% after the close of the market.

Compounding the trade concerns were concerning signs for the economy emerging from Japan to the United States.

Japan's exports slumped yet again, falling 6.7% in June, while manufacturers' confidence fell to a three-year low in July on the back of the trade tensions and slowing China's growth.

US housebuilding fell in June for a second consecutive month, with building permits also falling, in a possible sign of more trouble ahead for the housing market.

The earnings anxiety and macro data boosted demand for safe-haven assets, with yields on benchmark 10-year and 30-year US Treasuries climbing overnight.

Eurozone government bond yields slipped back towards record lows on Thursday as economic indicators and corporate earnings deepened gloom on the global economy and increased bets on interest-rate cuts by major central banks.

Amid the gloomy outlook, bets for further monetary policy easing from major central banks have grown, with speculation on whether the US Federal Reserve will be cut by 25 basis points or 50 basis points in July.

While markets take comfort from central banks' willingness to support growth, said Sunil Krishnan, head of multi-asset funds at Aviva Investors, there were concerns for equity markets that have rallied on the back of stimulus expectations.

The weak start to the Q2 earnings season may spill over into the outlook for the remainder of the year, threatening equity markets' stellar rally this year.

"We are probably in the middle of analysts downgrading Q3 company earnings expectations," he said.

Earlier in the day, MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.3%, with Tokyo's benchmark Nikkei tumbling 2.0%, its biggest one-day fall in four months.

POUND TO PARITY?

In currencies, the dollar edged lower against its rivals on the softer US&nbsp;Treasury yields, with investors focusing their attention on the Fed's meeting next week.

Against a basket of its rivals, the dollar edged 0.1% lower to 97.195.

Sterling was a shade higher at $1.244, off its lowest since April 2017 touched on Wednesday amid growing risks of Britain leaving the European Union in a no-deal Brexit.

Major British banks, such as HSBC, are already talking of the possibility of the pound breaching post-Brexit referendum lows of $1.149, with some asking whether the pound is headed for parity against both the dollar and the euro.

Oil prices were mixed, with US&nbsp;crude extending losses after data showed U.S. stockpiles of gasoline and other products rising sharply last week, suggesting weak demand.

Brent crude futures were up 6 cents, or 0.1%, at $63.71 a barrel by 0755 GMT. They fell by 1.1% on Wednesday.

Global shares slipped on Thursday on growing signs that a trade dispute between the United States and China was taking a toll on corporate earnings, with nerves spreading from Wall Street through Asia to European markets.

Global shares slipped on Thursday on growing signs that a trade dispute between the United States and China was taking a toll on corporate earnings, with nerves spreading from Wall Street through Asia to European markets. MSCI world equity index, which tracks shares in 47 countries, fell 0.2% to its lowest in nine days, while the Euro STOXX 600 slipped 0.5% to its lowest in almost three weeks. The earnings season, kicking off this week brought bad signs as rail freight giant CSX Corp, cut its revenue forecast as it warned of the impact of the US-China trade war, pushing down Wall Street indexes on Wednesday. In Europe, too, earnings were top of the agenda. Tech stocks led the slide as software firm SAP, Europe's most valuable tech stock by market cap, reported poor results, also flagging the impact of the US-China trade war. With nerves already on edge over when face-to-face talks between the United States and China will resume, US President Donald Trump on Tuesday maintained pressure on Beijing with a threat to put tariffs on another $325 billion of Chinese goods. Investors also cited a report that progress toward a US-China trade deal has stalled as the Trump administration works out how to address Beijing's demands that it ease restrictions on Huawei Technologies. "It's still about the US and China dispute," Christophe Barraud, chief economist and strategist at Market Securities. "The trade war is creating uncertainty, weighed on capEx, and clearly on trade flows." "There are also problems with guidance, especially in the transportation sector. The fact is that one of the key stories of this year is global trade flows contraction," he said. Adding to the concerns over corporate health, Netflix shed US subscribers for the first time in 8 years, sending shares falling over 10% after the close of the market. Compounding the trade concerns were concerning signs for the economy emerging from Japan to the United States. Japan's exports slumped yet again, falling 6.7% in June, while manufacturers' confidence fell to a three-year low in July on the back of the trade tensions and slowing China's growth. US housebuilding fell in June for a second consecutive month, with building permits also falling, in a possible sign of more trouble ahead for the housing market. The earnings anxiety and macro data boosted demand for safe-haven assets, with yields on benchmark 10-year and 30-year US Treasuries climbing overnight. Eurozone government bond yields slipped back towards record lows on Thursday as economic indicators and corporate earnings deepened gloom on the global economy and increased bets on interest-rate cuts by major central banks. Amid the gloomy outlook, bets for further monetary policy easing from major central banks have grown, with speculation on whether the US Federal Reserve will be cut by 25 basis points or 50 basis points in July. While markets take comfort from central banks' willingness to support growth, said Sunil Krishnan, head of multi-asset funds at Aviva Investors, there were concerns for equity markets that have rallied on the back of stimulus expectations. The weak start to the Q2 earnings season may spill over into the outlook for the remainder of the year, threatening equity markets' stellar rally this year. "We are probably in the middle of analysts downgrading Q3 company earnings expectations," he said. Earlier in the day, MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.3%, with Tokyo's benchmark Nikkei tumbling 2.0%, its biggest one-day fall in four months. POUND TO PARITY? In currencies, the dollar edged lower against its rivals on the softer US Treasury yields, with investors focusing their attention on the Fed's meeting next week. Against a basket of its rivals, the dollar edged 0.1% lower to 97.195. Sterling was a shade higher at $1.244, off its lowest since April 2017 touched on Wednesday amid growing risks of Britain leaving the European Union in a no-deal Brexit. Major British banks, such as HSBC, are already talking of the possibility of the pound breaching post-Brexit referendum lows of $1.149, with some asking whether the pound is headed for parity against both the dollar and the euro. Oil prices were mixed, with US crude extending losses after data showed U.S. stockpiles of gasoline and other products rising sharply last week, suggesting weak demand. Brent crude futures were up 6 cents, or 0.1%, at $63.71 a barrel by 0755 GMT. They fell by 1.1% on Wednesday.

Global Markets: Stocks slide as US-China trade war takes toll on earnings

Expressing concern over the large public debt in Italy, the European Commission has asked the government of Italy to address worries about its big-spending 2019 budget by November 13.

The European Commission also called the debt as a source&nbsp;of concern for the entire Eurozone,&nbsp;

Italy is locked in a tussle with the EU executive, which earlier this month rejected the government's expansionary budget and asked Rome to submit a new one within three weeks.

The Italian Prime Minister Giuseppe Conte met with his economy minister on Tuesday to discuss the Italian budget.

Italian banks have lost nearly 40 billion euros ($45 billion) of market capitalisation since May, with small and mid-sized lenders worst-hit by a sell-off on concerns that Rome's budget crisis will lead to a capital crunch in the third-largest euro zone economy.

Faced with the government's unwillingness to accommodate European Union demands for fiscal discipline, investors have been dumping Italian government bonds, which account for about 10 per cent of Italian banks' total assets. That has forced lenders into costly write-downs, lifted funding costs and darkened their profit outlook.

The hefty loss in market capitalisation comes as the eurozone banking watchdog releases results of its latest stress test of European lenders, with Italian banks under the greatest scrutiny.

(With inputs from Reuters)

Expressing concern over the large public debt in Italy, the European Commission has asked the government of Italy to address worries about its big-spending 2019 budget by November 13.

Expressing concern over the large public debt in Italy, the European Commission has asked the government of Italy to address worries about its big-spending 2019 budget by November 13. The European Commission also called the debt as a source of concern for the entire Eurozone, Italy is locked in a tussle with the EU executive, which earlier this month rejected the government's expansionary budget and asked Rome to submit a new one within three weeks. The Italian Prime Minister Giuseppe Conte met with his economy minister on Tuesday to discuss the Italian budget. Italian banks have lost nearly 40 billion euros ($45 billion) of market capitalisation since May, with small and mid-sized lenders worst-hit by a sell-off on concerns that Rome's budget crisis will lead to a capital crunch in the third-largest euro zone economy. Faced with the government's unwillingness to accommodate European Union demands for fiscal discipline, investors have been dumping Italian government bonds, which account for about 10 per cent of Italian banks' total assets. That has forced lenders into costly write-downs, lifted funding costs and darkened their profit outlook. The hefty loss in market capitalisation comes as the eurozone banking watchdog releases results of its latest stress test of European lenders, with Italian banks under the greatest scrutiny. (With inputs from Reuters)

Debt a worry for whole Eurozone: EU Commission tells Rome 

The eurozone bailout fund ESM decided on Friday to hold off the disbursement of a 1 billion euro loan tranche for Greece to wait for confirmation from Athens it fulfilled the condition of arrears clearance for the release of the money.

An ESM spokesman said Greece made satisfactory progress to meet the conditions for the release of the loan but not quite.

"Confirmation from the Greek authorities is still needed that some payments for arrears clearance are fully executed. This is necessary in order to take the decision on the release of the remaining 1 billion euros," the spokesman said.

"Therefore the ESM Board of Directors decided today in Paris to postpone its decision on this issue," he said.

The money is available until June 15.

Greece made satisfactory progress to meet the conditions for the release of the loan but not quite

The eurozone bailout fund ESM decided on Friday to hold off the disbursement of a 1 billion euro loan tranche for Greece to wait for confirmation from Athens it fulfilled the condition of arrears clearance for the release of the money. An ESM spokesman said Greece made satisfactory progress to meet the conditions for the release of the loan but not quite. "Confirmation from the Greek authorities is still needed that some payments for arrears clearance are fully executed. This is necessary in order to take the decision on the release of the remaining 1 billion euros," the spokesman said. "Therefore the ESM Board of Directors decided today in Paris to postpone its decision on this issue," he said. The money is available until June 15.

Eurozone holds off on 1 billion euro tranche for Greece

Crisis-stricken Italy should work to resolve its current political crisis while staying within the eurozone, a senior US Treasury official said Tuesday.

US Treasury Secretary Steven Mnuchin is due to meet later this week with his counterparts at a Group of Seven ministerial meeting in British Columbia, Canada, an event sure to be dominated by the Italian crisis and Washington's multi-front trade disputes with major economies.

A power struggle between Italy's presidency and populist parties on Tuesday shook global markets and called the country's continued membership in the European single currency into question.

"I think it would be better if they were to work things out within the eurozone without making significant changes there and certainly the Italians have to opportunity to do that," a senior US Treasury official told reporters in a briefing before the ministerial meeting.

The official, who spoke on condition of anonymity under Treasury Department ground rules, said the department was monitoring developments closely but saw no immediate danger to the stability of the wider financial system.

"At this point, no, I don't see any systemic impact," he said.

 
&nbsp

US Treasury Secretary Steven Mnuchin is due to meet later this week with his counterparts at a Group of Seven ministerial meeting in British Columbia, Canada

Crisis-stricken Italy should work to resolve its current political crisis while staying within the eurozone, a senior US Treasury official said Tuesday. US Treasury Secretary Steven Mnuchin is due to meet later this week with his counterparts at a Group of Seven ministerial meeting in British Columbia, Canada, an event sure to be dominated by the Italian crisis and Washington's multi-front trade disputes with major economies. A power struggle between Italy's presidency and populist parties on Tuesday shook global markets and called the country's continued membership in the European single currency into question. "I think it would be better if they were to work things out within the eurozone without making significant changes there and certainly the Italians have to opportunity to do that," a senior US Treasury official told reporters in a briefing before the ministerial meeting. The official, who spoke on condition of anonymity under Treasury Department ground rules, said the department was monitoring developments closely but saw no immediate danger to the stability of the wider financial system. "At this point, no, I don't see any systemic impact," he said.

Italy should remain in eurozone: US Treasury

French President Emmanuel Macron and German Chancellor Angela Merkel on Friday pledged to overcome differences in order to formulate a roadmap for a reform of the euro zone which they will seek to get approved by their European peers in June.

Merkel, who was narrowly re-elected to a fourth term as chancellor, wants to fulfil her incoming government&#39;s pledge to deliver a &quot;new start&quot; for Europe. Macron, too, has made euro zone overhaul a central goal since taking power last May.

However, members of Merkel&#39;s conservative bloc are wary of more comprehensive European integration, especially if it means that Germany, Europe&#39;s economic powerhouse, would be pooling risks and debts with other, less financially stable countries.

&quot;We are not always on the same page. But Germany and France have also achieved a lot in the past and now we have the firm intention to do that again,&quot; Merkel said as she met Macron for the first time since she formed a new coalition government.

The goal of the reform push has to be to stabilise the 19-country euro zone and improve its competitiveness of the single currency bloc, Merkel said, adding that it must also provide for more convergence on asylum policies.

&quot;We&#39;ll put forward a clear, ambitious roadmap by June for this overhaul,&quot; Macron said, adding that the plan should also address further integration of the bloc on migration, defence and trade.

The roadmap will also touch on the banking union, budgetary issues, Europe&#39;s Stability Mechanism and tax convergence, a source in Macron&#39;s office said.

&quot;Our aim is that the Europeans - at 27 for some issues, at 19 for what is euro zone-related - agree on a roadmap for euro zone reform and more broadly for growth and innovation,&quot; the source said after their meeting.

There is already substantial reform under way in the euro zone, including plans for a single deposit insurance scheme that would protect individuals&#39; savings.

However, the appetite for deeper integration, such as Macron&#39;s grand ideas for a standalone euro zone budget, a single euro zone finance minister and a dedicated fund that would help countries facing external shocks, is limited.

The Netherlands and seven other EU states issued a joint statement in early March saying the first priority should be to ensure countries implement measures that have already been decided.

Macron, 40, has waited impatiently for the Germans to form a government and is itching to press ahead.

The chancellor, 63, knows that Macron, in his first term, needs to deliver on his promises, well aware that a large proportion of France&#39;s electorate remains susceptible to far-right and far-left populists who are sceptical about the EU.

In January, when they last met for formal discussions on the eurozone and Merkel was still negotiating over a coalition, the pair said they hoped to present their plans to member states at an EU summit in March.

But the next EU leaders&#39; meeting in June now the new deadline.

&quot;We must agree by June a Franco-German roadmap for the whole euro zone. It&#39;ll be very tough work,&quot; French Finance Minister Bruno Le Maire said after talks with his German counterpart, Olaf Scholz.

Yet, even if they can get the 17 other euro zone members to agree to further reforms -- how better to deploy their 500 billion euro ESM rescue fund -- there will be a tight schedule to implement those changes before the EU has to tackle its next big challenges: Britain&#39;s formal exit from the union in March 2019 and European Parliament elections shortly afterwards.

Merkel, who was narrowly re-elected to a fourth term as chancellor, wants to fulfil her incoming government's pledge to deliver a "new start" for Europe. Macron, too, has made eurozone overhaul a central goal since taking power last May.

French President Emmanuel Macron and German Chancellor Angela Merkel on Friday pledged to overcome differences in order to formulate a roadmap for a reform of the euro zone which they will seek to get approved by their European peers in June. Merkel, who was narrowly re-elected to a fourth term as chancellor, wants to fulfil her incoming government's pledge to deliver a "new start" for Europe. Macron, too, has made euro zone overhaul a central goal since taking power last May. However, members of Merkel's conservative bloc are wary of more comprehensive European integration, especially if it means that Germany, Europe's economic powerhouse, would be pooling risks and debts with other, less financially stable countries. "We are not always on the same page. But Germany and France have also achieved a lot in the past and now we have the firm intention to do that again," Merkel said as she met Macron for the first time since she formed a new coalition government. The goal of the reform push has to be to stabilise the 19-country euro zone and improve its competitiveness of the single currency bloc, Merkel said, adding that it must also provide for more convergence on asylum policies. "We'll put forward a clear, ambitious roadmap by June for this overhaul," Macron said, adding that the plan should also address further integration of the bloc on migration, defence and trade. The roadmap will also touch on the banking union, budgetary issues, Europe's Stability Mechanism and tax convergence, a source in Macron's office said. "Our aim is that the Europeans - at 27 for some issues, at 19 for what is euro zone-related - agree on a roadmap for euro zone reform and more broadly for growth and innovation," the source said after their meeting. There is already substantial reform under way in the euro zone, including plans for a single deposit insurance scheme that would protect individuals' savings. However, the appetite for deeper integration, such as Macron's grand ideas for a standalone euro zone budget, a single euro zone finance minister and a dedicated fund that would help countries facing external shocks, is limited. The Netherlands and seven other EU states issued a joint statement in early March saying the first priority should be to ensure countries implement measures that have already been decided. Macron, 40, has waited impatiently for the Germans to form a government and is itching to press ahead. The chancellor, 63, knows that Macron, in his first term, needs to deliver on his promises, well aware that a large proportion of France's electorate remains susceptible to far-right and far-left populists who are sceptical about the EU. In January, when they last met for formal discussions on the eurozone and Merkel was still negotiating over a coalition, the pair said they hoped to present their plans to member states at an EU summit in March. But the next EU leaders' meeting in June now the new deadline. "We must agree by June a Franco-German roadmap for the whole euro zone. It'll be very tough work," French Finance Minister Bruno Le Maire said after talks with his German counterpart, Olaf Scholz. Yet, even if they can get the 17 other euro zone members to agree to further reforms -- how better to deploy their 500 billion euro ESM rescue fund -- there will be a tight schedule to implement those changes before the EU has to tackle its next big challenges: Britain's formal exit from the union in March 2019 and European Parliament elections shortly afterwards.

Merkel, Macron plan roadmap by June on euro zone reform

Euro zone manufacturers ended 2017 by ramping up activity at the fastest pace in more than two decades, a survey showed on Tuesday, and rising demand suggests they will start the new year on a high.

The bloc&#39;s economy outpaced its peers last year, and the European Central Bank plans to scale back its stimulus programme from this month.

IHS Markit&#39;s December final manufacturing Purchasing Managers&#39; Index for the bloc was 60.6, matching an earlier preliminary reading and above November&#39;s 60.1. That was the highest since the survey began in June 1997.

An index measuring output, which feeds into a composite PMI due on Thursday and seen as a good guide to economic health, rose to 62.2 from November&#39;s 61.0 - its highest in over 17 years and has only been above that once in the survey&#39;s history.

&quot;The euro zone manufacturing boom gained further momentum in December, rounding off the best year on record and setting the scene for a strong start to 2018,&quot; said Chris Williamson, chief business economist at IHS Markit.

&quot;Forward-looking indicators bode well for the new year: new orders rose at a near-record pace while purchasing growth hit a new peak as firms readied themselves for higher production. Meanwhile, job creation was maintained at November&#39;s record pace.&quot;

Despite factories raising prices again last month, albeit, at a slightly weaker rate than in November, an index measuring new orders nudged up to 61.5 from 61.4, a level not seen since around the start of the century.

Inflation was 1.5 per cent in November, below the ECB&#39;s 2 per cent target ceiling, but the central bank announced in October it will halve its monthly asset purchases to 30 billion euros from January.

A majority of economists in a Reuters poll last year said they thought the ECB should shut the door on the programme in September, but they were split on whether it actually would.

Eurozone manufacturers ended 2017 by ramping up activity at the fastest pace in more than two decades, a survey showed on Tuesday, and rising demand suggests they will start the new year on a high

Euro zone manufacturers ended 2017 by ramping up activity at the fastest pace in more than two decades, a survey showed on Tuesday, and rising demand suggests they will start the new year on a high. The bloc's economy outpaced its peers last year, and the European Central Bank plans to scale back its stimulus programme from this month. IHS Markit's December final manufacturing Purchasing Managers' Index for the bloc was 60.6, matching an earlier preliminary reading and above November's 60.1. That was the highest since the survey began in June 1997. An index measuring output, which feeds into a composite PMI due on Thursday and seen as a good guide to economic health, rose to 62.2 from November's 61.0 - its highest in over 17 years and has only been above that once in the survey's history. "The euro zone manufacturing boom gained further momentum in December, rounding off the best year on record and setting the scene for a strong start to 2018," said Chris Williamson, chief business economist at IHS Markit. "Forward-looking indicators bode well for the new year: new orders rose at a near-record pace while purchasing growth hit a new peak as firms readied themselves for higher production. Meanwhile, job creation was maintained at November's record pace." Despite factories raising prices again last month, albeit, at a slightly weaker rate than in November, an index measuring new orders nudged up to 61.5 from 61.4, a level not seen since around the start of the century. Inflation was 1.5 per cent in November, below the ECB's 2 per cent target ceiling, but the central bank announced in October it will halve its monthly asset purchases to 30 billion euros from January. A majority of economists in a Reuters poll last year said they thought the ECB should shut the door on the programme in September, but they were split on whether it actually would.

Euro zone factories ended 2017 with record high growth: PMI

The European Commission sounded the alarm on Wednesday over Italy&#39;s high level of public debt, adding to concerns about the eurozone&#39;s third-largest economy.

&quot;In the case of Italy, the persisting high government debt is a reason of concern,&quot; the European Commission said in a statement, adding that Brussels would write to Rome giving it until spring 2018 to bring things back in order.

The European Commission sounded the alarm over Italy's high level of public debt on Wednesday, adding to concerns about the eurozone's third-largest economy

The European Commission sounded the alarm on Wednesday over Italy's high level of public debt, adding to concerns about the eurozone's third-largest economy. "In the case of Italy, the persisting high government debt is a reason of concern," the European Commission said in a statement, adding that Brussels would write to Rome giving it until spring 2018 to bring things back in order.

Italy's high level of debt reason for concern: EU

Eurozone consumer prices rose to a stronger 0.4 per cent in September, official data said, offering hope that a disputed programme by the ECB to stimulate the economy may be finally delivering.

Eurozone unemployment meanwhile was unchanged at 10.1 per cent in August, the Eurostat statistics agency said.

Both figures were in line with forecasts by analysts surveyed by financial services company Factset.

(AFP)

The figures offer some hope that a disputed programme by the ECB to stimulate the economy may be finally delivering

Eurozone consumer prices rose to a stronger 0.4 per cent in September, official data said, offering hope that a disputed programme by the ECB to stimulate the economy may be finally delivering. Eurozone unemployment meanwhile was unchanged at 10.1 per cent in August, the Eurostat statistics agency said. Both figures were in line with forecasts by analysts surveyed by financial services company Factset. (AFP)

Eurozone inflation rises to 0.4 per cent in September: Eurostat

Euro zone business growth was at its weakest since the start of last year in August, suggesting the bloc&#39;s already struggling economy is losing what little momentum it had, a survey showed on Monday. 
 
The slow growth came as firms offered deeper discounts despite rising input costs, adding to policymakers&#39; concerns. 
 
Markit&#39;s final composite Purchasing Managers&#39; Index (PMI) for Euro zone was 52.9 in August, below a flash estimate of 53.3 and July&#39;s 53.2. That was its lowest since January 2015 but it has been above the 50 mark that divides growth from contraction since mid-2013. 
 
Chris Williamson, chief business economist at IHS Markit said, &quot;While the overall picture is one of steady but sluggish 0.3 per cent growth in the third quarter, the revised figures indicate that the economy is losing rather than gaining momentum.&rdquo; 
 
At just 0.2 per cent in August inflation is nowhere near the ECB&#39;s 2 per cent target ceiling and the composite output price fell to 49.3 last month, under July&#39;s 49.8. 
 
&quot;Inflationary pressures are also cooling amid intense competition. The survey data will fuel expectations that the ECB would prefer not to wait before injecting more stimulus into the economy,&quot; Williamson said. 
 
Growth in the bloc&#39;s dominant service industry also declined. Its PMI was 52.8, matching June&#39;s 17-month low and below July&#39;s 52.9 and flash estimate of 53.1. 
 
With the outlook somewhat bleak, optimism among service firms was at its gloomiest since late 2014. The business expectations index registered 60.7, down from 60.9 in July. 
 
( Reuters)

The slow growth came as firms offered deeper discounts despite rising input costs, adding to policymakers' concerns

Euro zone business growth was at its weakest since the start of last year in August, suggesting the bloc's already struggling economy is losing what little momentum it had, a survey showed on Monday. The slow growth came as firms offered deeper discounts despite rising input costs, adding to policymakers' concerns. Markit's final composite Purchasing Managers' Index (PMI) for Euro zone was 52.9 in August, below a flash estimate of 53.3 and July's 53.2. That was its lowest since January 2015 but it has been above the 50 mark that divides growth from contraction since mid-2013. Chris Williamson, chief business economist at IHS Markit said, "While the overall picture is one of steady but sluggish 0.3 per cent growth in the third quarter, the revised figures indicate that the economy is losing rather than gaining momentum.” At just 0.2 per cent in August inflation is nowhere near the ECB's 2 per cent target ceiling and the composite output price fell to 49.3 last month, under July's 49.8. "Inflationary pressures are also cooling amid intense competition. The survey data will fuel expectations that the ECB would prefer not to wait before injecting more stimulus into the economy," Williamson said. Growth in the bloc's dominant service industry also declined. Its PMI was 52.8, matching June's 17-month low and below July's 52.9 and flash estimate of 53.1. With the outlook somewhat bleak, optimism among service firms was at its gloomiest since late 2014. The business expectations index registered 60.7, down from 60.9 in July. ( Reuters)

Euro zone business growth at slowest since start of 2015: PMI

Eurozone finance ministers will today wrangle over whether to inflict penalties on Spain and Portugal for running up excessive deficits against EU rules for years. 
 
A decision by the 19 ministers of the single currency to punish the two countries would be an unprecedented step, and would put attention on overspending France, which is on course to break the rules next year. 
 
French finance minister Michel Sapin -- whose country was coincidentally beaten by Portugal on Sunday in the Euro 2016 football tournament -- said today that Portugal does not deserve punishment on its budget and argued for a light touch. 
 
&quot;Portugal has made enormous efforts in the past years. It does not deserve excessive discipline,&quot; said Sapin in Paris ahead of the talks which start at 1300 GMT. 
 
France&#39;s plea for leniency came after Germany recently warned Portugal against making &quot;a serious mistake&quot; of flouting the rules. 
 
Those remarks by German finance minister Wolfgang Schaeuble angered Portugal, which summoned Germany&#39;s ambassador to Lisbon in protest. 
 
The European Commission, the EU&#39;s executive arm, last week officially declared Spain and Portugal in violation of budget rules despite fears that austerity orthodoxy by Brussels will further stoke anti-EU populism in the wake of the Brexit vote. 
 
But many EU powers, led by Germany, have long hoped for the commission to crack down on public overspenders, even amid the fallout of the British vote to quit the bloc and a poor economy. 
 
The often-broken rules call for budget deficits not to exceed 3 per cent of gross domestic product. 
 
An endorsement by the ministers would give the commission 20 days to prepare penalties, but Spain and Portugal could make an official request for zero-sanctions within 10 days that would include a firm commitment to fix their budget.Spain on Friday defended its economic policies despite the embarrassing sanctions procedure and said it remained confident that it would avoid a fine. 
 
&quot;It`s a question of good sense. We have made efforts and I believe that will be taken into account,&quot; said Spanish Deputy Prime Minister Soraya Saenz de Santamaria. 
 
Under EU rules, the commission could impose fines of up to 0.2 per cent of gross domestic product on eurozone countries that repeatedly ignore the deficit limits -- but to date it has not dared using its full power. 
 
Portuguese Prime Minister Antonio Costa warned last week that imposing a fine would only embolden euroscepticism in the wake of Britain&#39;s decision to leave the European Union if Brussels applies sanctions. 
 
Spain and Portugal have been under the EU&#39;s excessive deficit procedure since 2009 because of recurrent fiscal holes following the global financial crisis. 
 
Bailed-out Portugal, long considered a star reformer, sharply cut its budget deficit from close to 10 per cent of GDP in 2010 to 4.4 per cent last year, but that still overshoots targets and the bloc&#39;s limit. 
 
Spain, while avoiding a eurozone bailout, suffered through six years of recession. In 2015 it reported a deficit of 5.1 per cent of gross domestic product (GDP), way off the target of 4.2 per cent set by the commission and the normal 3.0-per cent limit. 
 
France is now in the firing line for next year after a court of auditors in Paris warned that the French government was likely to miss targets for 2016. 
 
Brussels has warned that France will not be allowed to exceed the three per cent deficit target again. 
 
(AFP)

The decision would put attention on overspending France, which is on course to break the rules next year

Eurozone finance ministers will today wrangle over whether to inflict penalties on Spain and Portugal for running up excessive deficits against EU rules for years. A decision by the 19 ministers of the single currency to punish the two countries would be an unprecedented step, and would put attention on overspending France, which is on course to break the rules next year. French finance minister Michel Sapin -- whose country was coincidentally beaten by Portugal on Sunday in the Euro 2016 football tournament -- said today that Portugal does not deserve punishment on its budget and argued for a light touch. "Portugal has made enormous efforts in the past years. It does not deserve excessive discipline," said Sapin in Paris ahead of the talks which start at 1300 GMT. France's plea for leniency came after Germany recently warned Portugal against making "a serious mistake" of flouting the rules. Those remarks by German finance minister Wolfgang Schaeuble angered Portugal, which summoned Germany's ambassador to Lisbon in protest. The European Commission, the EU's executive arm, last week officially declared Spain and Portugal in violation of budget rules despite fears that austerity orthodoxy by Brussels will further stoke anti-EU populism in the wake of the Brexit vote. But many EU powers, led by Germany, have long hoped for the commission to crack down on public overspenders, even amid the fallout of the British vote to quit the bloc and a poor economy. The often-broken rules call for budget deficits not to exceed 3 per cent of gross domestic product. An endorsement by the ministers would give the commission 20 days to prepare penalties, but Spain and Portugal could make an official request for zero-sanctions within 10 days that would include a firm commitment to fix their budget.Spain on Friday defended its economic policies despite the embarrassing sanctions procedure and said it remained confident that it would avoid a fine. "It`s a question of good sense. We have made efforts and I believe that will be taken into account," said Spanish Deputy Prime Minister Soraya Saenz de Santamaria. Under EU rules, the commission could impose fines of up to 0.2 per cent of gross domestic product on eurozone countries that repeatedly ignore the deficit limits -- but to date it has not dared using its full power. Portuguese Prime Minister Antonio Costa warned last week that imposing a fine would only embolden euroscepticism in the wake of Britain's decision to leave the European Union if Brussels applies sanctions. Spain and Portugal have been under the EU's excessive deficit procedure since 2009 because of recurrent fiscal holes following the global financial crisis. Bailed-out Portugal, long considered a star reformer, sharply cut its budget deficit from close to 10 per cent of GDP in 2010 to 4.4 per cent last year, but that still overshoots targets and the bloc's limit. Spain, while avoiding a eurozone bailout, suffered through six years of recession. In 2015 it reported a deficit of 5.1 per cent of gross domestic product (GDP), way off the target of 4.2 per cent set by the commission and the normal 3.0-per cent limit. France is now in the firing line for next year after a court of auditors in Paris warned that the French government was likely to miss targets for 2016. Brussels has warned that France will not be allowed to exceed the three per cent deficit target again. (AFP)

Eurozone mulls fines for Spain, Portugal for running excessive deficits

Asian stocks pushed higher again on Monday, building on last week&#39;s rally as central banks around the world promised support to financial markets after Britain&#39;s vote to leave the European Union (EU) fuelled fears of another rout. 
 
The optimism that characterised last week continued as investors tracked another surge in New York and Europe, helped by upbeat US and Eurozone data. 
 
However, analysts warned there was still a plenty of headwinds as Britain and EU leaders must agree a breakaway deal, while the global economy remained fragile. 
 
Tokyo rose 0.4 per cent by the break, Hong Kong climbed 1.3 per cent, Shanghai added 0.8 per cent and Seoul 0.3 per cent. 
 
South Korea&#39;s promise of $17 billion in stimulus last week came as dealers speculate that Japan will bolster its own multi-billion-dollar programme, while the chances of the US raising interest rates this year have all but evaporated. 
 
On Thursday, Bank of England boss Mark Carney became the latest to provide assurances, indicating policymakers could embark on fresh monetary easing -- raising the possibility of a cut in rates. 
 
Richard Jerram, chief economist at Bank of Singapore, said, &quot;Overall the impact of Brexit on the global economy seems likely to be limited, with the pain concentrated on the UK and, to a lesser extent, the rest of the EU.&quot; 
 
But Nicholas Teo, a trading strategist at KGI Fraser Securities in Singapore, told Bloomberg News, &quot;While the potential for increased liquidity from central banks has helped calm stock markets, there&rsquo;s still a lot of uncertainty out there. 
 
&quot;The strengthening US dollar isn&rsquo;t good for emerging markets. With China still on a slowdown, US recovery tentative and the messy UK-EU divorce, volatility will remain heightened,&quot; he added.&nbsp; 
 
The Pound edged up against the dollar after taking a hammering from the referendum outcome. In early trade it bought $1.3307 against $1.3267 Friday in New York and is well up from the 31-year low $1.3121 touched at the start of last week. 
 
(AFP)

The optimism that characterised last week continued as investors tracked another surge helped by upbeat US and Eurozone data

Asian stocks pushed higher again on Monday, building on last week's rally as central banks around the world promised support to financial markets after Britain's vote to leave the European Union (EU) fuelled fears of another rout. The optimism that characterised last week continued as investors tracked another surge in New York and Europe, helped by upbeat US and Eurozone data. However, analysts warned there was still a plenty of headwinds as Britain and EU leaders must agree a breakaway deal, while the global economy remained fragile. Tokyo rose 0.4 per cent by the break, Hong Kong climbed 1.3 per cent, Shanghai added 0.8 per cent and Seoul 0.3 per cent. South Korea's promise of $17 billion in stimulus last week came as dealers speculate that Japan will bolster its own multi-billion-dollar programme, while the chances of the US raising interest rates this year have all but evaporated. On Thursday, Bank of England boss Mark Carney became the latest to provide assurances, indicating policymakers could embark on fresh monetary easing -- raising the possibility of a cut in rates. Richard Jerram, chief economist at Bank of Singapore, said, "Overall the impact of Brexit on the global economy seems likely to be limited, with the pain concentrated on the UK and, to a lesser extent, the rest of the EU." But Nicholas Teo, a trading strategist at KGI Fraser Securities in Singapore, told Bloomberg News, "While the potential for increased liquidity from central banks has helped calm stock markets, there’s still a lot of uncertainty out there. "The strengthening US dollar isn’t good for emerging markets. With China still on a slowdown, US recovery tentative and the messy UK-EU divorce, volatility will remain heightened," he added. The Pound edged up against the dollar after taking a hammering from the referendum outcome. In early trade it bought $1.3307 against $1.3267 Friday in New York and is well up from the 31-year low $1.3121 touched at the start of last week. (AFP)

Asian markets extend rally on central bank hopes

eurozone

Eurozone, News on Eurozone, stories on Eurozone, articles on Eurozone, Eurozone stories at Wion, Eurozone news, Eurozone latest news