Daily Brief - 7 Mar 2024

Monzo secured fresh funding, valuing the British fintech at $5 billion

Monzo, a pioneer in online banking, just got a big boost with fresh funding, reaching an impressive valuation of $5 billion. Leading the funding round was Alphabet's growth fund, CapitalG, pushing Monzo's value up from its previous $4.5 billion mark in 2021. Unlike many startups struggling in the current high-interest and low-confidence environment, Monzo shines brightly, planning to expand its digital wallet services to the US, Germany, and France. Despite Europe's startup funding taking a hit recently, Monzo's success brings a wave of optimism. However, it's still behind its British rival Revolut, valued at $33 billion, as Monzo relies heavily on interest for revenue, which could face challenges if interest rates drop.

Gold reaches record high, sparkling in investors' eyes

Gold prices soared to a historic peak, crossing $2,100 per ounce, as investors looked for a safe place to park their money amidst economic uncertainties. The surge is partly due to expectations of central banks lowering interest rates later this year, provided inflation doesn't spike. This move towards gold, often seen as a stable investment during volatile times, was accelerated by recent weak manufacturing data from the US. Reflecting on the past, the current price of gold, despite being at an all-time high, still falls short of its 1980 inflation-adjusted peak, suggesting there might still be room to grow.

ECB keeps rates steady amid future cut hopes

The European Central Bank (ECB) has decided to hold the deposit rate at 4% for now, but new economic forecasts are making a strong case for potential rate cuts later in the year. Despite inflation getting closer to the 2% target, officials are taking a cautious approach, waiting for more data, particularly on wages, before taking any action. ECB President Christine Lagarde is expected to hint at a possible rate cut in June, as long as there's clearer evidence of Europe's labor market cooling down. Meanwhile, there's a bit of a stir at the ECB over comments made by an executive board member on hiring practices related to climate knowledge. Overall, the ECB is preparing for future policy adjustments while keeping a close eye on economic indicators.