The synchronised policy tightening as central banks across the world start to raise interest rates has led to pressures on global equity markets, particularly in the US. Equity markets can gain alongside interest rates moving higher, however not if the markets think rates are moving too high, too quickly. This can create fears that hiking rates will hinder growth. This is relevant at the moment since central banks are tightening to try and control inflation. However, with US stocks showing some basing action, European stocks offering better value, and the EuroStoxx at a decent support level this could be the time for some gains. The seasonal factors would certainly confirm this.

In the last 10 years, between February 10 and February 20, EuroStoxx50 has risen 10 times with an annualised return of 130.43%. The largest gain has been over 5% and the smallest gain was 0.68%.

Major Trade Risks: The main risk for this outlook is either any bad news for Europe or if stocks start selling off again on concerns that central banks are raising interest rates too quickly.