ECB Should Consider a 25 Basis Points Rate Cut Next Month: Šimkus
In an interview with CNBC’s “Europe Early Edition” on Wednesday, Gediminas Šimkus, the Bank of Lithuania’s chair and a member of the European Central Bank’s Governing Council, expressed support for a “25-basis-point reduction” at the upcoming ECB meeting in June.
Šimkus highlighted several disinflationary trends affecting the eurozone, including a drop in job listings, decreasing oil and gas prices, and the euro’s appreciation against the dollar. He noted that President Donald Trump’s tariffs are expected to have disinflationary effects in the short term.
“While the medium- and long-term impacts remain uncertain, the short-term effects of the tariffs are clearly disinflationary,” he remarked. However, he emphasized that ECB policy should be based on eurozone developments rather than U.S. trade policies.
“Our decisions should reflect conditions within the eurozone rather than U.S. trade practices,” Šimkus told CNBC. “Given the many disinflationary forces at play, a rate cut in June seems to be the right course of action.”
— Chloe Taylor
Volkswagen Reports 37% Decline in First-Quarter Profit
The German automotive leader Volkswagen announced a significant decrease in profit for the first quarter as it copes with the impact of U.S. tariffs on the global automotive sector.
Volkswagen’s operating profit for the first quarter was €2.9 billion ($3.3 billion), down 37% from the same period last year. Nevertheless, the company reported a revenue increase to €77.6 billion, which is a 2.8% rise year-over-year, chiefly due to stronger vehicle sales outside of China.
— Sam Meredith
UBS Exceeds Profit Expectations with $1.69 Billion Earnings
Swiss banking giant UBS surpassed profit expectations amid efforts to mitigate considerable share price drops that have affected its status as Europe’s largest bank, as a result of U.S. tariffs.
The bank reported a net profit attributable to shareholders of $1.692 billion in the first quarter, exceeding the consensus estimate of $1.359 billion from an LSEG analyst survey. Group revenue during this period reached $12.557 billion, falling short of the forecast of $12.99 billion.
— Ruxandra Iordache
European Markets: Opening Predictions
According to IG data at 4 a.m. U.K. time, European markets are expected to open mixed on Wednesday.
The FTSE 100 in London is predicted to rise slightly by 5.6 points to 8,475, Germany’s DAX is up 34.7 points to 22,486, and Italy’s MIB is expected to increase by 77.6 points to 37,443. In contrast, France’s CAC 40 is projected to decline by 6.9 points to 7,561.
— Jenni Reid
China’s Manufacturing Activity Falls to Lowest Level in Two Years
China’s manufacturing sector experienced a more significant drop than anticipated, reaching a near two-year low as trade tensions with the U.S. adversely affected bilateral trade.
The official purchasing managers’ index (PMI) fell to 49.0 in April, dipping below the critical 50-mark that signals expansion versus contraction for the first time since January, as reported by the National Bureau of Statistics on Monday.
This figure was lower than analysts’ expectations of 49.8, indicating a considerable slowdown after a peak in March when manufacturing activity grew at its fastest pace in a year, driven by exporters rushing to ship products ahead of higher tariffs.
— Anniek Bao
Samsung Reports Higher First-Quarter Earnings as Chip Sales Surge
Samsung Electronics delivered better-than-expected operating profit and revenue on Wednesday, driven by a rise in chip sales amidst concerns over impending “reciprocal” U.S. tariffs.
The South Korean firm reported a 10% increase in revenue year-over-year and a 1.5% growth in operating profit for the first quarter.
Shares of Samsung Electronics remained relatively stable post-results.
— Dylan Butts, Lee Ying Shan
