DB - 3 Stocks to Buy With the European Central Bank Planning to Raise Interest Rates
After roughly eight years of negative real interest rates, the European Central Bank (ECB) is preparing to raise its benchmark interest rate, known as the minimum bid rate, for the first time in 11 years amid sky-high inflation in the region. The ECB recently said it is preparing to increase its minimum bid rate by 25 basis points (0.25%) in July and then perhaps make a larger move in September. The ECB also recently said that in July it planned to end its bond-buying program to inject liquidity into the European economy. The broader market expects the ECB will raise rates by roughly 135 basis points by the end of 2022.
Bank stocks typically benefit from rising rates. European banks have been in a rate-starved environment since the Great Recession, taking much more of a beating than U.S. bank stocks over the past decade. Here are three European bank stocks to buy that should greatly benefit when the ECB raises interest rates.
The largest bank in Germany, Deutsche Bank (NYSE: DB) , has more than $1.4 trillion in assets and operates in the investment banking, private banking, and asset-management markets. The bank has had more than its fair share of regulatory headaches but is a very large benefactor of rising interest rates.
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3 Stocks to Buy With the European Central Bank Planning to Raise Interest Rates