Europe is bearing the brunt of the Russian-Ukrainian conflict, and we see the risk of a recession becoming more pronounced as the energy crunch hits real incomes.
The ECB appears to be on the verge of a potential policy mistake by insisting that economic growth continues to justify higher interest rates. But we believe that the ECB will realize its mistakes earlier than the Fed, and that the economic shock will be felt earlier in the euro area, and its growth will start from a lower point than the United States.
On the bright side, Europe has the opportunity to unite more closely to accelerate the green transition, and the euro area banking industry is also expected to increase interest income due to interest rate hikes. But there are not many opportunities for Europe.
Just earlier, the Fed continued to hike rates by 75 basis points. The European Central Bank also raised interest rates by 50 basis points this month. That could accelerate Europe's recession. European stocks will enter recession earlier.
Since the beginning of this year, Germany's DAX30, France's CAC40 and the UK's FTSE 100 have all experienced significant declines.
Italian Prime Minister Mario Draghi resigned, Britain first Johnson was forced to step down. The crisis has just begun, forcing the resignation of two major European leaders.
But whether it is the current French President Emmanuel Macron, German Chancellor Schultz or European Union President von der Leyen, there is nothing that can be done about the current crisis. Eventually lead to the intensification of the energy crisis, from the energy crisis to trigger inflation, and then to form an economic crisis.
Before the big crisis, please stay away from European stocks.
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