After a stretch marked by caution and defensiveness, markets across Europe began to reposition, spurred not by sudden events, but by the gradual resurfacing of two distinct undercurrents, policy recalibration in the United States and renewed diplomatic momentum closer to home.
Financials and technology names drew early interest, buoyed by an improving risk backdrop that had, until recently, been constrained by stubborn rate expectations and geopolitical static. That constraint now appears to be loosening. In the US, the conversation around interest rates has begun to pivot. While the Federal Reserve has avoided definitive signals, recent language and positioning suggest that cuts may no longer be out of reach within a visible timeframe.
At the same time, movement on the diplomatic front, particularly around Ukraine, is beginning to register. While no breakthrough has been confirmed, the optics around negotiations have shifted. The mere prospect of engagement has taken some heat out of defence-related positioning and, perhaps more importantly, reduced the latent discount applied to European assets exposed to the conflict’s secondary effects.
JPMorgan European Discovery Trust plc is an investment trust company. The Investment Trust JEDT objective is to achieve capital growth from a portfolio of quoted smaller companies in Europe, excluding the United Kingdom.
