Though Europe is seeing a slowdown, its stocks might rally on a host of positive developments. Several Europe ETFs are currently trading at a one-month high with
DAX Germany ETF DAX adding about 2% on Feb 26. Let's delve a little deeper into what's working in favor of European stocks.
Chances of a Delay in Brexit
For the first time, the U.K. government announced that it is mulling over options to postpone Brexit. On Feb 26, British prime minister Theresa May noted that "in the
event deal fails to secure parliamentary approval on March 12, she will allow lawmakers two further votes."
On Mar 13, the Commons will be given a chance to agree on the U.K. exit without a deal on Mar 29. Although no-deal is the default option in the Article 50 process, it can be voted down. Then, the Commons will have a chance to request May for a short extension to Article 50, postponing Brexit by a few months,
per an article published on CNN . These abrupt policy changes came up due to huge internal differences in both the parties. Whatever the case, the prospect of a delay is strong enough to push Europe stocks higher.
US-China Trade Optimism
U.S. President Donald Trump announced a delay in the increase of tariffs on about $200 billion worth of Chinese goods, citing "
substantial progress " in trade talks with Beijing. With this, the year-long trade dispute between the world's biggest economies seems to be reaching a conclusion. Since the trade spat was a bother for almost the entire world, Europe stocks have heaved a sigh of relief for now (read: 10 ETF Areas to Gain as Trump Delays Additional Tariffs ).
Easy Money to Stay Here for Long?
The ECB had indicated that it looks to keep interest rates at the current record low level, at least through summers. But now,
the bank seems to be analyzing if the ongoing slowdown is temporary (or protracted) before taking a rate decision. With this, hopes of a few more months of an easy money policy seem to exist in the region (read: Worried About European Growth? Play These 5 ETFs ).
ETFs That Are at One-Month High
Below we highlight a few Europe ETFs that have been near a one-month high on Feb 26 and is likely to stay strong if Brexit gets delayed.
Invesco CurrencyShares British Pound Sterling FXB - Up 1.15%
Ireland iShares MSCI ETF EIRL - Up 1.08%
First Trust Europe Alphadex Fund FEP - Up 1.04%
Europe Small-Cap iShares MSCI ETF IEUS - Up 0.99%
Europe Financials iShares MSCI ETF EUFN - Up 0.93%
Europe Smallcap Dividend Wisdomtree DFE - Up 0.87%
Switzerland iShares MSCI ETF EWL - Up 0.87%
Denmark iShares MSCI ETF EDEN - Up 0.86%
United Kingdom iShares MSCI ETF EWU - Up 0.86%
Finland iShares MSCI ETF EFNL - Up 0.85%
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iShares MSCI United Kingdom ETF (EWU): ETF Research Reports Invesco CurrencyShares British Pound Sterling Trust (FXB): ETF Research Reports WisdomTree Europe SmallCap Dividend Fund (DFE): ETF Research Reports Global X DAX Germany ETF (DAX): ETF Research Reports First Trust Europe AlphaDEX Fund (FEP): ETF Research Reports iShares MSCI Europe Financials ETF (EUFN): ETF Research Reports iShares MSCI Denmark ETF (EDEN): ETF Research Reports iShares MSCI Finland ETF (EFNL): ETF Research Reports iShares MSCI Switzerland ETF (EWL): ETF Research Reports iShares MSCI Ireland ETF (EIRL): ETF Research Reports iShares MSCI Europe Small-Cap ETF (IEUS): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report