Invesco's strategist in the Asia-Pacific region (excluding Japan), Zhao Yaoting, stated that the European Central Bank announced a 25 basis point reduction in the deposit rate to 3.5%, in line with market expectations. Due to weak internal demand in the European market, the European Central Bank only slightly raised its core inflation forecast for 2024 by 0.1 percentage point to 2.9%, while slightly lowering its GDP forecast for this year to 0.8%.

Looking ahead, Invesco will continue to focus on the inflation rate in the service industry and the European market, as the relevant data remain high. Zhao Yaoting still expects the European Central Bank to cut interest rates by another 25 basis points before the end of the year, as wage growth continues to slow and profits come under pressure.

Overall, he believes that the macroeconomic environment for European assets is improving. With the interest rate cut by the European Central Bank and economic growth, financial conditions are easing and accelerating, although still below trend. These conditions are favorable for risk assets within the region, such as stocks and high yield bonds.