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eToro Market Analysis: US Valuation Risks Rising
Ben Laidler, global markets strategist at the investment and trading platform eToro, talks to us about the increase in valuation risks in the US. “The "exceptionalism" of US GDP growth and concerns about interest rates Higher long-term highs are putting upward pressure on yields, along with the return of the “term premium” from broader uncertainties, from fiscal sustainability to election results,” he explains.
Valuation risks in the US are increasing
Valuation risks in the US are increasing
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FED rate cuts and impact on digital assets, analysis by Javier Garcia de la Torre
Analysis carried out by Javier García de la Torre, Director of Binance Spain and Portugal, in which he examines the way in which these changes may influence the cryptocurrency market.
We expect the planned rate cuts to have a considerable impact on digital asset prices. Lower interest rates increase liquidity in the financial system, driving demand for higher-yielding and riskier assets, including cryptocurrencies. For example, BTC experienced a 375% increase between February 2020 and February 2022 when rates were close to zero.
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"Interest rate cuts are justified and necessary"
“With the weakness of the European economy and falling inflation, interest rate cuts are justified and necessary,” says Ben Laidler, global markets strategist at eToro. This situation would increase the gap with the United States “where the “exceptionalism” of economic growth keeps inflation uncomfortably high, casting doubt on whether the Federal Reserve can cut rates this year.”
The ECB prepares to act alone
The ECB is on track to cut interest rates from record levels at its June 6 meeting, following dovish comments from today's policy meeting. This is widening the transatlantic gap between interest rates and inflation, as Europe's 2.4% inflation would allow the ECB to cut interest rates three times this year.
With the European economy weak and inflation falling, interest rate cuts are justified and necessary. The same is not true in the United States, where the "exceptionalism" of economic growth keeps inflation uncomfortably high, casting doubt on whether the Federal Reserve will be able to cut rates this year.
"Interest rate cuts are a particularly positive catalyst for European stocks, with their delicate mix of relatively high debt levels, narrow profit margins and historically low valuations.
This content is for informational and educational purposes only and should not be considered investment advice or an investment recommendation. Past performance is not an indication of future results. CFDs are leveraged products and carry a high risk to your capital
#euro #dolar #interes $EUR $BTC $ETH
“With the weakness of the European economy and falling inflation, interest rate cuts are justified and necessary,” says Ben Laidler, global markets strategist at eToro. This situation would increase the gap with the United States “where the “exceptionalism” of economic growth keeps inflation uncomfortably high, casting doubt on whether the Federal Reserve can cut rates this year.”
The ECB prepares to act alone
The ECB is on track to cut interest rates from record levels at its June 6 meeting, following dovish comments from today's policy meeting. This is widening the transatlantic gap between interest rates and inflation, as Europe's 2.4% inflation would allow the ECB to cut interest rates three times this year.
With the European economy weak and inflation falling, interest rate cuts are justified and necessary. The same is not true in the United States, where the "exceptionalism" of economic growth keeps inflation uncomfortably high, casting doubt on whether the Federal Reserve will be able to cut rates this year.
"Interest rate cuts are a particularly positive catalyst for European stocks, with their delicate mix of relatively high debt levels, narrow profit margins and historically low valuations.
This content is for informational and educational purposes only and should not be considered investment advice or an investment recommendation. Past performance is not an indication of future results. CFDs are leveraged products and carry a high risk to your capital
#euro #dolar #interes $EUR $BTC $ETH