Markets are widely expecting the Federal Reserve to kick off its rate-cutting cycle this week. The question is how big a cut it will deliver, because “the market is exactly split” on whether it will be a quarter percentage point or a half percentage point, says the Private Bank’s EMEA CIO Dr. Dirk Steffen. “So it will either way lead to market moves.”

And as for the recent ups and downs in stocks more broadly, “We think volatility is here to stay”, Dirk says. He notes that investors will be paying increasing attention to the U.S. elections over the coming weeks, as well as the coming corporate earnings season. “In this environment we will see frequent ‘rotations’ back and forth”, Dirk says, as some interested market participants wait on the sidelines to buy the dips in certain sectors.

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