ECB's Lagarde Rejects Recession Label For Europe, Recalls Yellen's 'Forget It' Remark
Portfolio Pulse from Piero Cingari
ECB President Christine Lagarde has dismissed the notion that Europe is entering a recession despite potential negative growth, contrasting with the robust U.S. economy. She stated that rate cuts are premature, focusing on the disinflation process. Markets are skeptical, pricing in significant rate cuts by December 2024. The euro fell against the dollar, and the Invesco CurrencyShares Euro Currency Trust (FXE) dropped slightly, while the iShares Europe ETF (IEV) rose marginally.
January 25, 2024 | 9:58 pm
News sentiment analysis
Sort by:
Ascending
NEGATIVE IMPACT
The Invesco CurrencyShares Euro Currency Trust (FXE) fell by 0.4% following ECB President Lagarde's remarks on the European economy and interest rates.
The drop in FXE is directly related to Lagarde's comments and the subsequent decline in the euro-dollar exchange rate. The skepticism of the markets towards the ECB's stance on rate cuts may continue to put pressure on the FXE in the short term.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
The iShares Europe ETF (IEV) closed 0.4% higher, despite the broader concerns about the European economy and the ECB's decision to hold interest rates.
IEV's rise, albeit modest, could be attributed to investor confidence in the European market's resilience or other factors not directly related to the ECB's current policy stance. The ETF's performance may be influenced by a range of European economic indicators.
CONFIDENCE 85
IMPORTANCE 60
RELEVANCE 70