Cold wind blowing across Europe

Since Donald Trump’s election, a cold wind has been blowing across Europe with disappointing macro figures and fears of a renewed trade war. At the same time, the heightened tensions between Russia and Ukraine are further weakening risk appetite in Europe. On the interest rate front, the divergence in monetary policies is accelerating (ECB rate cuts priced in at -39bp for Dec. 24). On the stock market front, the Euro Stoxx 50 posted its sixth consecutive week in the red, while US indices held up fairly well despite Nvidia’s results having initially been perceived as (slightly) disappointing. On the FX side, the EUR/USD is still plummeting (to its lowest level since 2022).