New Capital's Sam Glover: This US-Europe interest rates pattern could be an intriguing signal

European equities

clock • 5 min read

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

Join now

 

Already an Investment Week
member?

Login

More on Equities

Event Voice: Artemis' Cormac Weldon on the US

Event Voice: Artemis' Cormac Weldon on the US

Cormac Weldon looks into US markets.

Cormac Weldon, Head of US equities, Artemis Fund Managers
clock 18 November 2024 • 5 min read
Autumn Budget 24: Chancellor Reeves sets 20% IHT rate on AIM shares

Autumn Budget 24: Chancellor Reeves sets 20% IHT rate on AIM shares

Inheritance tax reform

Cristian Angeloni
clock 30 October 2024 • 1 min read
Partner Insight: Why investors shouldn't try to second-guess election results

Partner Insight: Why investors shouldn't try to second-guess election results

Investment Week
clock 28 October 2024 • 1 min read
Trustpilot