12.12.24 - Rate cut cycle continues

The European Central Bank (ECB) cuts the key rate by 0.25% (as expected) to 3%.

Markets: Euro continue to weaken against the USD. No impact on equity side.

My view: As I wrote already in my blog article “Europe, the struggling candidate – time for the pole-position, finally?” (15.07.2024), the European economy remains fragile due to several reasons. Furthermore, the ECB remains in an unfavorable position. On one hand, to fight against inflation which remains elevated in the European region. On the other hand, being less restrictive in its monetary policy to support the struggling economic environment. Therefore my view remains unchanged - no big potential for European equity indices in the mid-term, however, selectively remain invested.

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