UPDATE 2-Russian rouble surges past 67 vs dollar, stocks mixed

Updates with further gains in the rouble, adds analyst quote on stocks

May 11 (Reuters) – The Russian rouble pared early short-lived losses and surged past 67 against the U.S. dollar on Wednesday, artificially boosted by capital controls, while stocks were mixed after a long weekend.

The rouble has been volatile for weeks in thin trade in Moscow, propped up by capital controls but pressured by concerns about more sanctions being imposed on Moscow over what it calls a “special military operation” in Ukraine.

At 1508 GMT, the rouble was up 3% to 67.28 against the dollar on the Moscow Exchange RUBUTSTN=MCX after hitting 66.50, not far from last week’s high of 65.31 – its strongest level since March 2020.

“Exporters are likely to beef up FX sales starting today, as they need roubles to pay taxes in two weeks. Also, they will be selling FX revenues accumulated over the long weekend,” Sberbank CIB said in a note, explaining gains in the rouble.

Against the euro, the rouble jumped 4% to 70.33 EURRUBTN=MCX, around levels where it used to trade before the COVID-19 pandemic hit in 2020.

The rouble is currently being supported by the mandatory conversion of foreign currency by exporters and restrictions on capital outflows, while demand for FX from importers remains weak. Without the emergency measures imposed by the central bank the rouble would have been weaker.

“The Russian rouble’s fortunes are increasingly disconnected from the health of the Russian economy as international sanctions tighten,” ratings agency Scope said in a note.

Further rouble appreciation could pose risks for the budget, analysts say. Addressing the issue, the central bank has indicated it could ease some of its capital controls.

The rouble may see downside pressure mounting in the medium term as the country’s trade surplus should decline after Russia issued details on so-called parallel imports of goods, Promsvyazbank analysts said in a note.

Last week, Moscow published a list of goods from foreign carmakers, technology companies and consumer brands that the government has included in a “parallel imports” scheme aimed at shielding consumers from business isolation by the West. nL5N2WY56S

Russian stock indexes were mixed. The dollar-denominated RTS index .IRTS rose 2.5% to 1,115.5 points. The rouble-based MOEX Russian index .IMOEX shed 0.3% to 2,385.1 points, dragged lower by the firmer rouble.

The nearest technical support for the MOEX index is at 2,160, while the resistance lies at 2,840, Finam brokerage said.

For Russian equities guide see RU/EQUITY

For Russian treasury bonds see 0#RUTSY=MM

(Reporting by Reuters
Editing by Mark Potter and Angus MacSwan)

S&P 500, Nasdaq end higher in choppy session

NEW YORK, May 10 (Reuters) – The S&P 500 and Nasdaq ended higher on Tuesday, with big growth shares rising after the previous day’s selloff as Treasury yields tumbled.

Bank shares fell along with yields. The benchmark 10-year note yield dropped from more than a three-year high to below 3%.

The Dow also ended lower, and the day’s trading was choppy, with major indexes moving between gains and losses as investors were nervous ahead of the release of Wednesday’s U.S. consumer price index data and Thursday’s producer prices data.

Investors will be looking for signs that inflation is peaking.

Worries that the U.S. Federal Reserve may have to move more aggressively to curb inflation have driven the recent selloff in the market. A host of other concerns have added to the pressure.

“It’s just fear-based selling,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.

“It can’t just be the Fed’s going to raise rates to stave off inflation, because we’ve seen that before,” he said. Instead, investors have been worried about everything from rates and inflation to the war in Ukraine, supply chain problems and China’s COVID-19 lockdowns, Dollarhide said.

Shares of Apple Inc AAPL.O rose 1.6% and gave the S&P 500 and Nasdaq their biggest boosts.

The Dow Jones Industrial Average fell 84.96 points, or 0.26%, to 32,160.74, the S&P 500 gained 9.81 points, or 0.25%, to 4,001.05 and the Nasdaq Composite added 114.42 points, or 0.98%, to 11,737.67.

Technology and growth stocks, whose valuations rely more heavily on future cash flows, have been among the hardest hit in the recent selloff. The Nasdaq is down about 25% for the year so far.

S&P 500 technology rose 1.6% on the day and led S&P 500 sector gains. The S&P 500 growth index was up 0.9%, while the S&P 500 value index was down 0.4%.

Investors digested comments from Cleveland Fed President Loretta Mester, who said the U.S. economy will experience turbulence from the Fed’s efforts to bring down inflation running at more than three times above its goal and recent volatility in the stock market would not deter policymakers.

U.S. President Joe Biden in a speech Tuesday addressing high inflation said he was considering eliminating Trump-era tariffs on China as a way to lower prices for goods in the United States.

Among the day’s gainers, Pfizer Inc PFE.N shares rose 1.7% after it said it will pay USD 11.6 billion to buy Biohaven Pharmaceutical Holding Co BHVN.N. Biohaven shares jumped 68.4%.

On the down side, Peloton Interactive Inc (PTON) dropped 8.7% as the fitness equipment maker warned the business was “thinly capitalized” after it posted a 23.6% slide in quarterly revenue.

Volume on U.S. exchanges was 15.45 billion shares, compared with the 12.55 billion average for the full session over the last 20 trading days.

Declining issues outnumbered advancing ones on the NYSE by a 1.36-to-1 ratio; on Nasdaq, a 1.34-to-1 ratio favored decliners.

The S&P 500 posted 1 new 52-week highs and 63 new lows; the Nasdaq Composite recorded 19 new highs and 1,066 new lows.

Big Tech & growth stocks lose over USD 1 trillion in market capitalization since Fed hike in May.

(Reporting by Caroline Valetkevitch; additional reporting by Amruta Khandekar and Devik Jain in Bengaluru; Editing by Sriraj Kalluvila, Shounak Dasgupta and Aurora Ellis)

UPDATE 2-New car sales in Russia slump by record 78.5% y/y in April

Adds analyst comments, detail

May 11 (Reuters) – New car sales in Russia fell by a record 78.5% year on year in April, dropping for a tenth month in a row as the sector was hit by acute shortages and soaring prices caused by disrupted logistics and a volatile rouble.

New car sales of 32,706 cars in April were less than one-quarter of those sold a year earlier, the Association of European Businesses (AEB) said on Wednesday.

“The depth of contraction exceeded that in April 2020 when sales were suspended due to epidemiologic restrictions,” analysts at Promsvyazbank said in a note.

“Such a sharp drop can be explained by a shortage of cars at warehouses, by rising prices and prohibitive rates on car loans.”

The Russian central bank raised its key rate to 20% in late February in an emergency move aimed at containing financial risks days after Russia launched what it calls “a special military operation” in Ukraine. It has since trimmed the rate back to 14%. nL5N2WR43U

Sales of new cars this year are expected to shrink by at least 50%, the AEB said last month, after a 4.3% increase in 2021. nL2N2WI0QW

Demand is unlikely to recover due to a decline in real incomes, making the car industry the most affected industrial sector, VTB Capital analysts said.

“Parallel imports won’t help lower the deficit tangibly due to high costs,” VTB Capital said.

In April, sales of Lada cars by Russia’s largest automaker AvtoVaz AVAZ.MM fell 78%, AEB data showed.

In the first four months of 2022, Russia’s sales of new cars and light commercial vehicles declined 43% to 293,846 units, AEB said.

The Russian car market had ranked among the most promising globally until 2014, encouraging foreign automakers to build factories there.

Before the latest Western sanctions over Ukraine, Russian car sales stood at 1.67 million last year compared with almost 3 million sold a year in the 2000s.

(Reporting by Reuters; editing by Jason Neely, Kirsten Donovan)

No quiet retirement for Philippines’ Duterte when Marcos takes over presidency

By Karen Lema and Neil Jerome Morales

MANILA, May 11 (Reuters) – A quiet retirement for Philippines President Rodrigo Duterte is unlikely when he makes way for successor Ferdinand Marcos Jr., but efforts to put him on trial for thousands of killings in his “war on drugs” appear unlikely to prosper.

Duterte’s daughter, Sara Duterte-Carpio, helped get Marcos elected by agreeing to be his vice presidential running mate, allowing the son of the late dictator to tap her father’s huge support to seal a comeback for the disgraced Marcos dynasty.

Though there has been no formal quid-pro-quo, political experts say it is unlikely Marcos would risk burning crucial bridges by allowing the International Criminal Court (ICC) to investigate Duterte over the alleged execution-style killings in his war on drugs.

Duterte, 77, will be stripped of the legal armour shielding him from legal action once he becomes a private citizen next month, making him an open target. Unbowed, he has said he will search for drug peddlers after he retires and “shoot them and kill them”.

At least 6,200 people have been killed in the war on drugs during Duterte’s six-year rule. Rights groups and critics say law enforcers summarily executed drug suspects, but police say those killed were armed and had violently resisted arrest.

The ICC in September approved an investigation into the killings, but temporarily suspended it in November at Manila’s request. The ICC did not immediately respond when asked for an update on the probe’s status.nL1N2SA2YK

“He will be safe, untouchable. Worse, even as ex-president, he could still weigh in on policy,” said Carlos Conde, senior Philippines Researcher at Human Rights Watch.

Marcos, during the campaign, has already intimated what he might do with the ICC investigators. “I will let them into the country, but only as tourists,” he said in January.

“We have a functioning judiciary that is why I do not see the need for a foreigner to come and do the job for us,” Marcos said, mirroring the position of Duterte, who has repeatedly said he will not cooperate with the ICC.

POLITICS IN HIS DNA

However, it is not only the ICC that Duterte would have to contend with but also families of victims and human rights groups demanding accountability for the killings and other violations in the past six years.

Randy delos Santos, an uncle of high-school student Kian delos Santos, whose death in 2017 led to rare convictions of police officers in the drug war, hoped the ICC would resume its probe.

“There are so many families of drug war victims, not just me,” said Delos Santos, who cited many other cases belying government claims the victims had fought back.

Cristina Palabay of human rights group Karapatan said: “We are also preparing cases to file against Duterte after he steps down from office.”

Duterte has only given hints on his future plans. He said this week he will return to his hometown of Davao city, where he served as mayor for more than two decades before becoming president in 2016.

“I will stay here in Davao. Even as a civilian, I will still help you. Just like what I promised when I first became mayor,” Duterte said after casting his vote on Monday.

Earl Parreno, author of a biography of Duterte entitled “Beyond Will & Power”, said he finds it difficult to imagine the president totally dropping out of politics. “Will he really retire quietly?” he said.

Duterte may decide to run for local office in the mid-term polls in 2025, Parreno said. It is not uncommon for former presidents in the Philippines to seek lower posts in office.

“If you have politics in your DNA, it would be difficult to stay away from it,” he said.

True to form, Duterte did not mince words when telling supporters of his plans after the presidency.

“I will go riding on a motorcycle and roam around…and I’ll search for drug peddlers, shoot them and kill them,” he said.

(Reporting by Karen Lema
Editing by Ed Davies and Raju Gopalakrishnan)

((karen.lema@thomsonreuters.com; +632 841-8938;))

UPDATE 3-Next Czech central bank chief proposes end to rate hikes

President turns to Michl to end rate hikes

Michl has opposed policy tightening over past year

Was seen before as wild-card possibility for job

Crown falls over 1% to two-month low

Updates throughout with analyst, details on Michl

By Jan Lopatka and Jason Hovet

PRAGUE, May 11 (Reuters) – The Czech National Bank’s (CNB) next governor, Ales Michl, called for an end to fast interest rate hikes to fight the strongest inflation pressures in almost three decades after his appointment to lead the bank on Wednesday.

In a ceremony at Prague Castle, President Milos Zeman appointed Michl, a bank board member who has opposed policy tightening that has brought the bank’s key rate CZCBIR=ECI up by 550 basis points since last June to a 23-year high of 5.75%.

Michl, 44, will replace outgoing Governor Jiri Rusnok for six years from July, and his arrival may sway the bank’s views on using rates against inflation – especially if Zeman appoints like-minded people to three other seats on the seven-strong board in the coming weeks.

The crown, after losing 2% last week on leaks that Michl would get the job, slipped more than 1% to hit a two-month low of 25.47 to the euro after he received the official nod.

Czech inflation is currently running above 14%, the highest level since 1993, and is starting to hit households who face soaring utility bills. Analysts expect a sharp slowdown in growth this year.

Michl said after his appointment that his main goal would be returning inflation to the bank’s 2% target, a process he expected to take two years.

But higher rates were no remedy given inflation was mainly driven by energy prices, he said, and the level of rates when he starts the job should be enough.

“I expect I will propose, at the first meeting I lead in the summer, stability of interest rates for some time,” he said.

“We will evaluate impacts of monetary policy to date, new indicators coming from the economy, and after a certain period decide what next.”

Markets have priced in one last beefy rate hike in June, although that will still lag the bank’s latest outlook showing interest rates soaring this quarter before ebbing after that.

“If the (new) bank board really explicitly excludes further rate growth, it may be seen on the crown, given current high inflation expectations,” said Jan Bures, chief economist at Patria Finance.

“The CNB can, like the NBP (Polish central bank) or NBH (Hungarian central bank) in the past, become a less credible partner for markets and can be pressed into some new action through a weaker exchange rate.”

Economists said Michl may also clash with the central bank’s expert team that has built rate hikes into its forecasts.

“If (Michl’s) conclusions diverge so substantially from the analytics of the central bank, it is not clear to me how does Michl himself see his job at the helm,” said economist Jaromir Baxa from the Faculty of Social Sciences of the Charles University.

VARIOUS PLANS

Zeman has not indicated whether he will replace Vice-Governor Tomas Nidetzky and board member Vojtech Benda – both hike supporters whose terms expire alongside Rusnok’s but who are eligible for reappointment. The president must also fill the seat Michl will vacate when he takes over as governor.

Michl had not always been dovish, voting in the minority for rate hikes after joining the board in 2018.

Before that, Michl worked as an economist at Raiffeisenbank and set up an investment fund. He advised former finance and prime minister, billionaire Andrej Babis, now leader of the opposition and a possible presidential candidate.

Michl has said inflation would drop if cost-side shocks end, budget deficits are cut, and companies show wage restraint.

He has spoken out against sales of any of the bank’s large foreign currency reserves, including its just-expanded programme of selling the returns on those reserve assets.

He has instead advocated for investing the bank’s reserves into higher-yielding assets to make profits, and supporting a sovereign investment fund he proposes to set up.

During the COVID pandemic, the bank rejected his proposal of sending a part of its profit – made mainly on unrealised exchange-rate gains – to the state budget, given the bank is obliged to first cover past losses and create reserve funds.

(Reporting by Jan Lopatka, Jason Hovet and Robert Muller, writing by Jan Lopatka, Editing by Catherine Evans, Tomasz Janowski and Hugh Lawson)

((jan.lopatka@thomsonreuters.com; +420 234 721 614; Reuters Messaging: jan.lopatka.thomsonreuters.com@reuters.net))

UPDATE 3-Euro zone bond yields do an about-turn after U.S. inflation data

Updates rates, adds comment

By Dhara Ranasinghe and Joice Alves

LONDON, May 11 (Reuters) – Euro zone government bond yields rose on Wednesday after data showing a bigger-than-expected rise in inflation last month in the United States.

Data showing U.S. annual inflation rose 8.3% in April, down from 8.5% a month earlier, but above analyst expectations for an 8.1% rise, triggered a wave of selling in bonds.

Germany’s 10-year Bund yield was last up 1.5 basis points on the day at 1.018% DE10YT=RR, having fallen just below 1%, its lowest level in almost a week earlier.

“I think it is natural to see yields rising after a strong core CPI like we had,” said Peter McCallum, rates strategist at Mizuho.

But capping the yields rally, a 75 basis point hike from the Federal Reserve seems out of sight at this point, McCallum added. “I think there’s enough that the market can look at in that report to not necessarily price too much more hawkishness from the Fed,” he said.

Italian 10-year bond yields also rose after the U.S. CPI data but was last close to their lowest in almost a week hit earlier in the day, at 2.93% IT10YT=RR.

Earlier in the session, yields across the currency bloc fell to their lowest levels in almost a week, with investors taking comfort from signs that any tightening in European Central Bank monetary policy will be gradual.

The ECB is likely to end its bond-buying stimulus programme early in the third quarter, followed by a rate hike that could come just “a few weeks” later, ECB President Christine Lagarde said. nL5N2X32V5

Analysts said the tone of ECB comments on Wednesday suggested a gradual rather than rapid rate-hike path, taking the edge off the aggressive rate-rise bets that drove borrowing costs across the bloc to multi-year highs as recently as Monday.

The ECB’s Francois Villeroy de Galhau said the ECB would start raising rates gradually from the summer. nL5N2X31SB

“One part of the message from the ECB is that rate hikes will start in July, but the other part is that the path will be gradual, which is what Lagarde is suggesting, too,” said Jan von Gerich, chief analyst at Nordea.

In another volatile session for bond markets, a key gauge of the market’s long-term euro area inflation expectations bounced back to almost 2.25% after the U.S. data. It fell to a seven-week low at 2.1939% EUIL5YF5Y=R earlier.

Elsewhere, the European Union priced 9 billion euros of bonds, maturing in 2025 and 2051, according to a memo seen by Reuters from one of the banks managing the syndicated-bond sale.

Germany sold 3.23 billion euros of 10-year Bunds and Portugal auctioned 750 million euros of bonds maturing in 2030. nS8N2UP081

(Reporting by Dhara Ranasinghe; Editing by Hugh Lawson, Kim Coghill and Mark Heinrich)

((Dhara.Ranasinghe@thomsonreuters.com; +442075422684;))

POLL-Turkey’s C/A seen recording deficit of $5.37 bln in March

reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/econ-polls?RIC=TRCURA%3DECI poll data

Deficit seen at $38.35 bln in 2022

ISTANBUL, May 11 (Reuters) – Turkey’s current account is expected to record a deficit of $5.37 billion in March and end the year with a deficit of $38.35 billion, a Reuters poll showed on Wednesday, as soaring energy prices widen the shortfall.

Wiping out Turkey’s chronic current account deficit, at $14.9 billion in 2021, has been one of the main goals under President Tayyip Erdogan’s new economic programme that also prioritises growth, exports and employment with low rates.

But Russia’s invasion of Ukraine has raised the price of oil and natural gas, making it more difficult for Turkey to meet the shortfall, given that tourism revenues could also drop this year due to fewer arrivals from the two countries – both usually major sources of tourists.

The trade deficit, a major component of the current account balance, surged 75% year-on-year in March to $8.17 billion, official data shows, mainly due to energy imports.

The median estimate of 13 economists in the Reuters poll for the current account deficit in March was $5.371 billion, with forecasts ranging between $4.27 billion and $7 billion.

The deficit was seen at $38.35 billion for 2022 as a whole, according to the median estimate of 12 economists, with the range of forecasts between $32.50 billion and $60 billion.

Economists have been revising up their forecasts for the 2022 deficit due to energy prices. The median forecast was $29 billion two months ago.

The deficit stood at $7.1 billion in January, the highest since Dec. 2017, and was $5.15 billion in February.

A currency crisis in 2018 led to a recession and a sharp contraction in imports, helping Turkey record a rare current account surplus in 2019.

Under Erdogan’s economic plan, the central bank cut its policy rate by 500 basis points since September, which led to a currency crisis that saw the lira lose 44% against the dollar last year. Compounded by soaring commodity prices, inflation surged to 70% in April.

Turkey’s central bank will announce March current account data at 0700 GMT on May 16.

(Reporting by Ali Kucukgocmen
Editing by Daren Butler)

((ali.kucukgocmen@thomsonreuters.com , @alikucukgocmen; +905319306206; Reuters Messaging: Reuters Messaging: ali.kucukgocmen.thomsonreuters.com@reuters.net))

After Philippines election triumph, Marcos visits dictator father’s grave

Despite big win, Marcos a polarising figure

Father’s burial a contentious issue for years

Marcos has promised to serve all Filipinos

‘Time to heal and unite’ – Duterte’s office

By Enrico Dela Cruz

MANILA, May 11 (Reuters) – Ferdinand Marcos Jr. went to the grave of his father, the disgraced Philippines dictator, the day after winning the presidential election, a visit that underscores the polarisation over the return to rule of the notorious political dynasty.

Images shared by Marcos’s team on Wednesday showed him in dark sunglasses, laying a bouquet of flowers atop his father’s grave in the Manila “heroes” cemetery, where the body was moved in 2016 after the family won a lengthy battle for the right to bury him alongside other presidents.

Past governments had refused to bury him at the cemetery because of his brutal 20-year era of martial law and autocracy, which ended with his overthrow in a 1986 “people power” uprising.

Marcos’s body had been kept in a refrigerated mausoleum in his northern hometown of Paoay, until President Rodrigo Duterte approved the burial with full military honours.

One image appeared to show Marcos Jr. wiping away tears on Tuesday as he stood before the grave, where a photo of his father was displayed, images on his Twitter account showed.

“The young Marcos is grateful to the Filipino people for giving him the landslide victory and to his father who (has) been his inspiration throughout his life and taught him the value and meaning of true leadership,” a statement with the images said.

The 64-year-old president-elect, better known as “Bongbong”, swept Monday’s election with more than double the votes of his nearest rival, winning an outright majority in a Philippine presidential contest for the first time in recent years.

He vowed on Tuesday to work for all people after his stunning election victory, and told the world to judge him by his presidency, not his family’s past. nL2N2X204T

Under the Marcos dictatorship, his family and cronies amassed an estimated $10 billion in ill-gotten wealth, a government-appointed commission found. Tens of thousands of suspected communist rebels and political foes were jailed, beaten or killed. nL3N2X12D7

Marcos has always praised his father, recently describing him as a statesman and “political genius”. He has described his rule as a “golden age” for the Philippines. nL3N2WO1JV

‘REVISION OF HISTORY’

Central to the victory of Marcos, his critics and political opponents say, was an orchestrated offensive on social media, aided by a network of influencers and bloggers, to dispel historical narratives of the Marcos rule, and present new versions of events.

The family has long denied wrongdoing and says it has not engaged in misinformation campaigns.

“The visit is part and parcel of the dramatics of the Marcos family,” said Bonifacio Ilagan, who was jailed and tortured during the martial law era.

“It is clear what is going to happen once he becomes president: The rehabilitation of Marcoses and revision of history is going to be complete.”

The office of outgoing President Duterte on Wednesday said the election showed the strength of Philippine democracy.

“The Filipino people have spoken and now is the time to heal and unite as one nation and one people,” spokesperson Martin Anadanar said.

Foreign Minister Teodoro Locsin, press secretary under President Corazon Aquino who succeeded the elder Marcos after he was driven into exile, shared the images of the incoming president’s visit to his father’s place of rest.

“The circle is complete. It remains with the Filipino people (to) take the situation in the direction of their own best interests or bend it in that direction,” Locsin said.

“We are just players on a stage locked in our roles repeating the same lines in the same plot until another world comes in to be.”

ANALYSIS-Marcos as Philippine president a boon for China, awkward for U.S.nL2N2X30B2

Fall and rise: Marcos family back in power in the PhilippinesnL3N2X12D7

EXPLAINER-What will a Marcos presidency in the Philippines look like? nL3N2X2290

Graphic on Philippines returns to Marcos rule https://tmsnrt.rs/394UVDO

INSTANT VIEW 2-Marcos rule to return to Philippines after election landslidennL3N2X0087

SPECIAL REPORT-Marcos could control hunt for family’s wealth as Philippines presidentnL3N2WV114

FEATURE-‘Our blood is boiling’: Victims angry as son of dictator closes in on Philippine presidencynL3N2WU0SN

Seeking return of disputed ‘golden age’, Philippine voters back son of dictator MarcosnL3N2WX0ZF

(Reporting by Karen Lema, Neil Jerome Morales and Enrico Dela Cruz; Editing by Martin Petty and Raju Gopalakrishnan)

((enrico.delacruz@tr.com))

UPDATE 2-ECB firms up expectations for July interest rate hike

Lagarde backs expectations for early rate hike

Villeroy, Mueller hints at further moves

Adds Villeroy, Schnabel

LJUBLJANA, May 11 (Reuters) – The European Central Bank has firmed up expectations that it will raise its benchmark interest rate in July for the first time in more than a decade to fight record-high inflation, with some policymakers even hinting on Wednesday at further hikes after the first.

With ECB policymakers clamouring for a rate hike for weeks, President Christine Lagarde has finally thrown her weight behind such a move, saying the central bank was likely to end its stimulus programme early in the third quarter, followed by a rate hike that could come just “a few weeks” later.

Most other major central banks have already raised borrowing costs but the ECB, which had fought too low inflation for a decade, is still pumping cash into the financial system via bond purchases.

“My expectation is that they should be concluded early in the third quarter,” Lagarde said at a conference in the Slovenian capital.

“The first rate hike, informed by the ECB’s forward guidance on the interest rates, will take place some time after the end of net asset purchases…(and) this could mean a period of only a few weeks.”

Inflation hit 7.5% in the euro zone last month and even measures that strip out food and energy prices rose above the ECB’s 2% target.

“What started as a one-off shock has now become a more broad-based phenomenon,” ECB policymaker Bostjan Vasle said at the same event. “When the circumstances change, the policy response must follow,” the Slovenian governor added.

ECB board member Isabel Schnabel said the ECB needed to act now to protect its credibility and stop inflation expectations, which have risen to 2% or slightly above, from spiralling out of control.

GROWING CALLS

The number of ECB policymakers calling for a July hike has been growing almost every day and on Wednesday alone included board member Frank Elderson, French central bank governor Francois Villeroy de Galhau and Bundesbank president Joachim Nagel. nL2N2X21OO nL5N2X31SB

“I think that from this summer onwards, the ECB will gradually raise its interest rates,” Villeroy de Galhau told France Inter radio.

Estonian governor Madis Mueller also hinted at a series of hikes that could lift the ECB rate on bank deposits, which is currently -0.5%, above zero by the end of the year for what would be the first time since 2014. nF9N2UZ01J

“Even if we go by 25 basis point increments, we may get to a positive rate by the end of the year,” he told Reuters in an interview.

(Reporting By Balazs Koranyi; Writing by Francesco Canepa in Frankfurt; Editing by Toby Chopra and Hugh Lawson)

((@FranCanJourno francesco.canepa@thomsonreuters.com; 004906975651247; Reuters Messaging: francesco.canepa.thomsonreuters.com@reuters.net))

BRIEF-Robinsons Land Posts Qtrly Operating Income From Domestic Operations Up By 12% To 2.29 Billion Pesos

May 11 (Reuters) – Robinsons Land Corp:

QTRLY OPERATING INCOME FROM DOMESTIC OPERATIONS UP BY 12% TO 2.29 BILLION PESOS
QTRLY NET INCOME SETTLED AT 1.74 BILLION PESOS

Source text for Eikon: ID:nPSXb6GTRd

Further company coverage: RLC.PS

((Reuters.Briefs@thomsonreuters.com;))

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