The last time interest rates were cut in Europe ahead of the United States it offered a prelude to compelling returns from the continent.
There is a pattern emerging that investors might want to delve into given what it could mean for European equities. Back in 1993, central banks across Europe such as the Bundesbank were cutting interest rates owing to lacklustre economic growth, while across the Atlantic, the US economy was performing strongly and the Federal Reserve was gearing up to increase its policy rate. This rather rare divergence of the interest rate path between the two regions proved to be a potent combination for equity returns across the European continent in the mid-1990s. ECB cuts interest rates for t...
To continue reading this article...
Join Investment Week for free
- Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
- Get ahead of regulatory and technological changes affecting fund management
- Important and breaking news stories selected by the editors delivered straight to your inbox each day
- Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
- Be the first to hear about our extensive events schedule and awards programmes