The ECB’s latest salvo in the fight against the prospect of deflation was initially met positively by markets. But, a lack of a clear message that the Bank will cut rates further from here sent markets falling again almost as quickly.
With all the talk about the pros and cons of the UK’s place in Europe, are we ignoring a buying opportunity for investing on the continent?
Investors need to consider the bigger picture when it comes to European equities, say Vincent Juvyns Alex Dryden. Global market strategists at JP Morgan Asset Management, the pair outline seven reasons to still buy Europe.
Equities markets around the world climbed sharply on news of Japan’s surprise decision to cut interest rates into negative territory.
ECB President Mario Draghi disappointed markets on Thursday. While the Bank delivered a 10 basis point cut to the deposit rate to an historic -0.3%, and extended the deadline of its asset purchase programme by six months, it kept the main refinancing and marginal lending rates steady at 5 and 30 basis points respectively.
S&P last week said 2015 will see the highest number of defaults since 2009, and so with the end of an era of very cheap money in sight, should bond investors be worried?
The ECB’s accommodative stance paves the way for European credit to outperform in 2016, according to Henderson’s head of fixed income Phillip Apel.
The unexpected drop in Eurozone core inflation in November announced on Wednesday served to reinforce expectations that ECB president, Mario Draghi will announce further easing measures on Thursday.
European equities should be the object of investor focus, say industry experts, with continental small caps providing the sole recovery play in global markets.
Eurozone prices fell by 0.1% in September from a year earlier, reversing a 0.1% increase the previous month.
Investors are still positioned in the winning trades of 2014, says Neuberger Berman’s Ugo Lancioni, but the case for those trades is now far from obvious.
Turbulence in bond markets has left bond investors nervous and cash piles high but while more movement is expected, certainty on a few issues could see investors moving back into the market during the second half of the year.
