Europe

Global consumer spending is likely to slow over the coming quarters, culminating in a major economic downturn in late 2024 or early 2025. Investors should maintain benchmark exposure to equities for now but look to turn more defensive by the end of this summer.

Europe did not witness a major policy reversal. Inflationary pressures are coming down, enabling the ECB to cut rates and European states to maintain soft budgets. Geopolitical challenges ensure that European parties continue to cooperate on national defense, economic security, and energy security.

The ECB is now firmly in easing mode, even if it refuses to pre-commit to a specific rate path. What does this data dependency mean for the euro and European yields?