Investors showed a keen interest in exchange-traded funds (ETFs) that mirror European stocks following the Bank of England’s recent comments hinting at potential future rate cuts. Despite no immediate changes at Thursday’s meeting, Bank of England President Andrew Bailey expressed optimism about the trajectory of inflation.
The iShares MSCI Eurozone ETF experienced a notable surge, reaching its highest level since June 2008 and marking a sixth consecutive day of gains, according to data from Dow Jones Market Data Group. This ETF focuses on mid- and large-sized equities denominated in euros, with key holdings including prominent companies like LVMH, SAP, and TotalEnergies.
In the United Kingdom, annual consumer price index inflation dipped to 3.2% in March from nearly 10% a year earlier, as noted by Bailey. However, it still exceeds the 2% inflation target, mirroring the situation in the United States.
Similarly, Federal Reserve Chairman Jerome Powell is grappling with inflation concerns, aiming to bring it down to a level conducive for potential rate adjustments. Despite efforts, inflation remains stubbornly high at 3.5%.
Addressing reporters after the May meeting, Powell acknowledged that inflation readings have surpassed expectations. He emphasized that achieving greater confidence in managing inflation might take longer than initially anticipated.
