Eurozone M3 money supply growth over the three months to January rose to 3.0%. It was 2.9% in the previous period.<\/p>\n
The update shows a 0.1 percentage point increase from one month to the next. The figures refer to the three-month rate of change in M3.<\/p>\n
We see the Eurozone’s M3 money supply growth edged up to 3.0% in January. This slight increase suggests that liquidity in the system is not contracting as quickly as some had hoped. This data point, on its own, reduces the immediate pressure on the European Central Bank to consider cutting interest rates.<\/p>\n
This aligns with other recent data, as inflation for the Euro area in January came in at 2.5%, slightly above the consensus forecast. Looking back at late 2025, the market was pricing in several rate cuts for this year, but that narrative is now being seriously challenged. We believe the ECB will remain cautious and hold rates steady for longer than previously anticipated.<\/p>\n
For traders, this means we should reassess short-term interest rate futures, such as those based on Euribor, as the pricing may need to adjust to a more hawkish ECB reality. The prospect of sustained higher rates relative to expectations will likely lend strength to the Euro. We are therefore looking at call options on the EUR\/USD pair, expecting it to find a stronger footing in the coming weeks.<\/p>\n
Conversely, this “higher for longer” rate environment could act as a drag on European equities. Higher financing costs can impact corporate profitability and investor appetite for risk. Consequently, we are considering adding protective put options on indices like the EURO STOXX 50 to hedge against potential downside.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Eurozone M3 money supply growth rose to 3.0% in three months to January, up from 2.9%.<\/p>\n","protected":false},"author":62,"featured_media":17024,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-43688","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\n\t\t