Market Snapshot - June 2024

The European Central Bank (ECB) cut its main refinancing rate as expected by 25bps to 4.25%, after over 2 years of tightening conditions to fight the highest Eurozone inflation recorded in decades and first desynchronization with the US Federal Reserve.
The ECB, whose stated objective is prices stability, started discussions to fight inflation in late 2021. Its first action was to reduce the pace of net asset purchases, which was halted by mid-2022. The general level of consumer prices in member states rose with the recovery from the COVID-19 crisis, and accelerated with the Russian invasion of Ukraine, peaking above 10% before slowing to 2.4% in April 2024, closer to the ECB’s 2% annual target inflation.