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...

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