Citi and ING Analysts Share Insights on Euro and European Stock Markets

Global financial markets are closely monitoring the current status of the euro and European stock markets ahead of the European Central Bank's (ECB) interest rate decision meeting.

ECB decision awaited for the euro According to ING analyst Frantisek Taborsky, the euro may experience a decline again after a brief relief due to recent position adjustments. Taborsky stated, "We will have to wait for Thursday's ECB meeting," noting that a 25 basis point rate cut seems almost certain at the meeting. It is anticipated that further discussions on rate cuts may begin during the post-meeting press conference, which could create pressure on the euro. With these expectations, the euro fell by 0.25% today against the dollar, reaching $1.0528.

Positive expectations for European stock markets Citi strategists predict that European stocks may rise by 10% by the end of 2025. Despite the ongoing threat of U.S. tariffs, strong global growth, low central bank interest rates, and improving corporate earnings outlooks are expected to lift the Stoxx Europe 600 Index. The index closed at 521.22 points on Monday. Led by Beata Manthey, the Citi team finds sectors related to the economic cycle, such as technology, luxury goods, and mining, attractive. Manthey believes it is the right time for investors to re-enter European stocks, as bearish positions have reached extreme levels, and rate cuts along with stable global growth could support a return to cyclical markets.

Citi confident in gold's upward potential According to a report prepared by Citi Research analysts on gold, the precious metal is expected to continue its upward movement in the long term. Both the deterioration in the U.S. labor market and the pressure of high interest rates on growth may lead to an appreciation of gold. Additionally, the increasing demand for ETFs is considered one of the supportive factors for gold prices. Long-term themes such as de-dollarization alongside global debt levels are also viewed as a positive environment for gold. Citi maintains its positive outlook on gold, keeping targets of $2,800 per ounce in three months and $3,000 per ounce in one year. Spot gold remains in a positive outlook today, rising 0.5% to around $2,670.