ECB back to hawkish cuts?
Two years after its first hike, as expected, the ECB cut interest rates by 25bp from 4.50% to 4.25% - the first time ever that it has anticipated the Fed in starting a cutting cycle.
- Lack of guidance by Governing Council on future path and higher inflation forecasts was slightly hawkish
- Data dependency was once again the leitmotiv of President Lagarde’s conference
- Emphasis on accumulating data “much later in the summer”, suggests that a July rate cut is effectively off the table.
- September anyone?
Fed preview
- The Fed meets this week and will announce its monetary policy decision on Wednesday evening (an unchanged outcome is widely expected)
- It will be anticipated by a few hours by the US CPI data in an interesting coincidence – Core CPI for May expected at 0.3% MoM*
- Friday’s payrolls data showed a robust labor market.
- Macro data seems increasingly unlikely to usher a rate cut before December
- The Dollar remains well supported
Macron's gambit
- The big news of the night is French President Macron calling snap parliamentary elections for June 30 after he received a drubbing at the hands of his far-right rival Marine Le Pen
- His German counterpart Olaf Scholz didn’t fare much better, with his Social Democrats suffering their worst performance in an EU election in history
- Italian Prime Minister Giorgia Meloni secured top spot in Rome • The three centrist groups (EPP, the Socialists and the liberals) will hold a comfortable majority, despite the far-right gaining seats, while the Greens suffered losses
- The euro slipped vs USD and CHF
Water - growing opportunity
Global resource scarcity drives demand for more sustainable solutions through increasing regulatory requirements, water reuse and recycling systems, and boosting integration of the circular economy and resource-efficient design.
- Main demand for water resources and infrastructure is driven by population growth, urbanisation, climate change, water scarcity and pollution.
- Leaking water infrastructure (c.30%-40% of water is lost annually through leakage in water infrastructure).
- Water and flow solutions are also requested in industrial water treatment, water distribution, semiconductor, marine, waste-/stormwater management, chemical process industry, cooling, life science and data centres (dramatically rising).
- The US has announced a $55bn investment in water infrastructure. Saudi Arabia has allocated $105bn for 3,300 water sector projects, plenty of others are on the way.
- Water infrastructure construction activity is projected to grow by 5% (CAGR) between 2023 and 2028.
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