Key interest rates have peaked, leading to a decline in interest rates and interest rate expectations as well as an improvement in market security.
With clearer pricing due to increased market security, investing activity should pick up again in 2024 and thus support prices. Although the first half of the year is likely to show only tentative signs of improvement, activity will pick up again in the second half.
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Strategy Implications
The consensus view is that monetary policy has peaked, as inflation rates across Europe retreat closer towards central bank targets. This will provide well-needed stability across financial markets and thus clarity on asset pricing – an opportunity investors should be ready to take.
