European equity indices are advancing modestly, reflecting a wait-and-see mood rather than conviction. Across the STOXX 600, gains are slight; defensive and rate-sensitive sectors are under the microscope. Geopolitical frictions and domestic political stresses, especially in France, add layers of uncertainty to an already delicate growth outlook.
Investors expect the European Central Bank to hold interest rates steady at today’s meeting. The consensus view is that policy rates won’t change, but what markets will look for is how the ECB frames forward guidance. Will Christine Lagarde signal potential cuts? Will some scenarios, trade conflicts, political risk, inflation dips, trigger an easing bias? How the ECB balances growth concerns with inflation that is returning toward, though still above, target will be key.
On the US front, inflation data will add further weight to Fed rate expectations. Analysts project headline Consumer Price Index (CPI) rose around 2.9% year-on-year in August, with the core inflation pace staying near 3.1%. If inflation comes in softer than feared, it may reinforce expectations of a rate cut by the Fed in their next meeting. Any upside surprise, however, could complicate that view.
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.
