What's going on?

On Thursday, the European Central Bank (ECB) made a small cut to its economic growth expectations for the eurozone over the next couple of years.

What does this mean?

The ECB has a great view of what�s going on in all of the eurozone�s economies. From this idyllic vantage point, it sets growth forecasts to help European governments and companies alike plan how best to balance their books.


In its latest assessment, the ECB doesn�t see any big trend changes, effectively saying that Europe�s doing okay at the moment (tweet this). But it lowered growth expectations for 2018 and 2019 by 0.1% because of some countries� growth looking volatile (ciao, Italy! ???????, Greece!) and worries about lower growth from foreign trade (because of potential trade wars).

Why should I care?

For markets: Europe�s still okay, for now.

The Euro Stoxx 50 (one of Europe�s major stock indices) rose on Thursday, despite reduced growth expectations. Things are still going okay for Europe at the moment � Germany�s doing well and Europe�s still likely to increase interest rates next year. But there�s a lot of uncertainty as countries are handing in budgets, and the chance of a painful Brexit is increasing according to the Bank of England. Some investors are worried that these risks could become real and stifle European growth.

The bigger picture: Emerging markets are getting a bit of respite.

After roughly a 40% fall since the start of the year, the Turkish lira was clucking loud and proud on Thursday. It climbed in value by more than 5% after the Turkish central bank raised interest rates (this makes Turkish lira more valuable to investors as they�d receive more interest on their cash in the bank). Companies exposed to Turkey (like European banks with Turkish debt) all rose on the news. Three cheers for Europe!