European Market Outlook 2024: A fine line to avoid stagnation

Europe looks set for a mild recession in 2024 before returning to growth, but tight financing conditions and geopolitical uncertainty could hamper the recovery. The key risk is a return to pre‑pandemic‑era stagnation, and the European Central Bank will need to calibrate policy very carefully to prevent this from occurring. An earlier‑than‑expected rate‑cutting cycle would favor bunds and would likely weaken the euro against other currencies.