Downturn in German economy eases slightly in March

post: ECB'S BUCH: PROFIT OUTLOOK FOR BANKS MAY DETERIORATE IF FUNDING COSTS INCREASE, LOAN GROWTH WEAKENS, OR LOSSES MATERIALISE. post: ECB'S BUCH: WE NEED TO CLOSE THE REMAINING GAPS IN OUR CRISIS MANAGEMENT FRAMEWORK AS SOON AS POSSIBLE. post: ECB'S BUCH: THIS YEAR, WE WILL INTENSIFY THE USE OF ESCALATION MECHANISMS TO ENSURE THAT SUPERVISORY FINDINGS ARE ADDRESSED AND DEFICIENCIES ARE REMEDIED BY BANKS.

The Swiss National Bank is lowering the SNB policy rate by 0.25 percentage points to 1.5%. The change applies from tomorrow, 22 March 2024. Banks’ sight deposits held at the SNB will be remunerated at the SNB policy rate up to a certain threshold, and at 1.0% above this threshold. The SNB also remains willing to be active in the foreign exchange market as necessary. The easing of monetary policy has been made possible because the fight against inflation over the past two and a half years has been effective. For some months now, inflation has been back below 2% and thus in the range the SNB equates with price stability. According to the new forecast, inflation is also likely to remain in this range over the next few years. With its decision, the SNB is taking into account the reduced inflationary pressure as well as the appreciation of the Swiss franc in real terms over the past year. The policy rate cut also supports economic activity. Today’s easing thus ensures that monetary conditions remain appropriate. The SNB will continue to monitor the development of inflation closely, and will adjust its monetary policy again if necessary to ensure inflation remains within the range consistent with price stability over the medium term. Inflation has declined further since the beginning of the year, and stood at 1.2% in February. This decrease was attributable to lower goods inflation. Inflation is currently being driven above all by higher prices for domestic services. The new conditional inflation forecast is significantly lower than that of December. In the short term, this is above all due to the fact that price momentum in the case of some categories of goods has slow post: SNB SEES 2024 INFLATION AT 1.4%, 2025 AT 1.2% AND 2026 AT 1.1%. post: SNB: MOMENTUM IN THE MORTGAGE AND REAL ESTATE MARKETS HAS WEAKENED NOTICEABLY IN RECENT QUARTERS. HOWEVER, THE VULNERABILITIES IN THESE MARKETS REMAIN. post: SNB: THE WEAK DEMAND FROM ABROAD AND THE APPRECIATION OF THE SWISS FRANC IN REAL TERMS OVER THE PAST YEAR ARE HAVING A DAMPENING EFFECT. post: SNB: WE ARE WILLING TO BE ACTIVE IN FOREIGN EXCHANGE.

Business activity in the euro area came close to stabilising in March, as provisional PMI® survey data registered only a marginal decline in output of goods and services. A modest ...