Weaker eurozone growth due to trade tensions, European Central Bank chief says

Weaker eurozone growth due to trade tensions, European Central Bank chief says

"But with Treasury yields rising, people are worrying we may be peaking on profits, or if GDP growth is peaking and we are now in a situation where markets are getting very nervous", he said, noting the U.S. Federal Reserve appeared to be in no mood to brake its rate-hike program. He said, however, taht the slowdown could also reflect more durable weaknesses.

Meanwhile, the European Central Bank said net asset purchases, at the current monthly pace of €30 billion, are meant to run until the end of September, or longer if necessary, until the Governing Council "sees a sustained adjustment in the path of inflation consistent with its inflation aim". The yield on 10-year German government bonds slid to 0.59%.

The yield has risen for six straight days - the longest upward run since September 2017, according to Reuters data.

Analysts said the European Central Bank could delay a decision on the fate of QE until July if economic data remain weak, but that its plans to phase out easy money probably remained intact.

"The ECB is largely brushing off concerns about a soft patch in the economy for the moment", said Frederik Ducrozet, an economist with Pictet Wealth Management in Geneva.

Policymakers will need to agree an end-date for the ECB's €2.55 trillion bond purchase programme, which has cut borrowing costs and kick-started growth, even if it has failed to lift inflation back to target.

The bank's quantitative easing (QE) programme, in which it now buys €30bn (£26bn) a month of eurozone bonds, is set to end in September this year.

Earlier Thursday, Sweden's central bank pushed back a plan to raise interest rates for the first time since 2011, warning that inflation in the largest Nordic economy remains too weak.

A dealer said the greenback hit multi-months high against a basket of currencies, bolstered by higher US Treasury yields, led by the 10-year benchmark breaching the three per cent threshold this week for the first time in four years.

Only two more meetings remain before September.

The ECB governing council at its meeting today decided that the interest rate on the main refinancing operations, the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00 per cent, 0.25 per cent and (-) 0.40 per cent respectively.

He also stated that risks related to global factors, including the threat of increased protectionism, have become more prominent.

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