By Robert Schramm-Fuchs, European Equities Portfolio Manager at Janus Henderson Investors

“In our view, today’s ECB press conference is encouraging for equity markets. It seems the ECB President Mrs Lagarde left the door firmly open for an April start to the rate cut cycle as she highlighted the importance of the updated staff projections which will become available in March. The President spoke a lot about wage pressures today, but the reality is that six-month headline and core inflation in the Eurozone have fallen back into the low 2’s% annualised rate already now."

"Monetary lead indicators point to a further reduction which should hint at annual inflation rate returning to its 2% target during 2H24. Given the stagnant European economy close to the brink of recession over the past 18 months already – vs a seemingly perfect soft landing in the US – ECB rate cuts should stay firmly in the equity market’s sight. In our European Large Cap funds, we are positioned bullishly, and are favouring sectors that have historically outperformed in rate cut cycles, e.g. technology and in particular semiconductors, financial services and consumer discretionary.”