Inflation expectations in Europe have dropped to their lowest in nearly two years, signaling investor confidence that central banks can reduce interest rates without sparking inflation. The eurozone’s five-year forward inflation swap has dipped below 2.1%, while the UK’s equivalent has fallen to 3.2%. This shift reflects a growing focus on recession risks rather than inflation, with global demand, especially from China, slowing down. However, analysts warn of potential long-term inflation pressures due to demographic changes and fiscal demands.

A little bit of positivity in the European market. There seems to be some confidence in the resilience and strength of the current world economy.

What do you think about that?