European Central Bank

The European Central Bank is set to cut interest rates again by 25 basis points on Thursday, just days before the US Federal Reserve (Fed) opens its own monetary policy easing cycle.

The inability of buyers to react showed today’s (10/9) third consecutive session of losses on the Greek stock market. Although initially the General Index had recovered above 1,440 points, sellers then took the reins again and led the market below 1,430 points.

For no obvious reason, except for the lack of buying interest, the Athens bourse started the week on particularly low turnover and losses for the majority of stocks. The market may be waiting for corporate developments before some cash flow is restored, a possibility being the upcoming Moody's rating verdict on Greece this Friday, or the European Central Bank meeting on Thursday.

The Greek stock market found itself in downward territory for the second consecutive day, falling back below 1,440 points, but keeping this critical threshold in close proximity. Athens failed to coordinate and went “against” the favorable sentiment of the international markets. Stabilizing trends on the board, with the General Index moving in a range of just 9 points.

According to Fitch Ratings, the European Central Bank (ECB) and central banks across the European Union are expected to endure "prolonged losses" due to increased borrowing costs. The credit agency projects that the total loss for the Eurosystem will amount to 160 billion euros from 2024 to 2028, before accounting for provisions, reserves, and taxes.

An additional 800 billion euros per year in investments are needed by the European Union to undertake rapid and substantial reforms to address its lag behind the United States and China. This is detailed in the much-anticipated report on EU competitiveness, prepared by former European Central Bank Governor Mario Draghi at the request of European Commission President Ursula von der Leyen.

European Union countries are buying too much of their defense equipment abroad, almost two thirds of it in the United States, and failing to invest enough in joint military projects, a landmark report on EU competitiveness warned on Monday.

Mario Draghi is calling for up to 800 billion euros a year in additional investment from EU member states so that the EU can regain the competitiveness of its economy and avoid being trapped in the US and China.

The European Central Bank is expected to cut interest rates again this week as inflation drifts back down towards its two-percent target, but policymakers will likely stay tight-lipped on future moves.

The ECB began raising rates sharply in mid-2022 to throttle surging consumer prices but has begun to ease the pressure as inflation rates have fallen.

Morningstar DBRS raised on Friday night its outlook of the Greek economy from Stable to Positive, while affirming the country's credit rating as BBB (low), i.e. investment grade.