A recession will engulf Europe early next year

Analysts at BCA are expecting a recession for Europe early in 2025:

• “Our conviction that a recession will engulf Europe early next year is strengthening.”

Citing:

• Leading global growth indicators continue to deteriorate
• weakening economic activity ahead
• steepening of the yield curve, the rebound in the VIX, the continued weakening of carry trades, and the relapse of commodity prices are all poor omens
• data softening in Europe

On the euro:

• EUR/USD always depreciates significantly after carry trades have unwound
• wait for the first rate cut from the Fed before selling the euro

This article was written by Eamonn Sheridan at www.forexlive.com.