Access a Recovering European Economy with the EURL ETF

After Europe’s economy languished amid an unforeseen wave of coronavirus cases and a slower-than-anticipated vaccine rollout, light is emerging at the end of the tunnel. Traders can access Europe’s reopening with the Direxion Daily FTSE Europe Bull 3X ETF (EURL).

Despite the challenges, traders aren’t avoiding Europe. EURL is up over 200% within the past year, as well as over 30% in 2021.

EURL seeks daily investment results that are equal to 300% of the daily performance of the FTSE Developed Europe All Cap Index. The index itself is a market capitalization weighted index that is designed to measure the equity market performance of large-, mid- and small-cap companies in developed markets in Europe.

“Europe’s economy is on track to return to its pre-crisis levels in 2022, the International Monetary Fund said on Wednesday, though this projection depends on the region’s Covid-19 vaccination campaign,” a CNBC report noted. “European countries have been forced to introduce new restrictions or toughen previous public health measures in recent weeks as Covid infections have surged. This led to a 0.2 percentage point drop in the IMF’s growth forecast for this year, which currently stands at 4.5%.”

EURL Chart

Growth in Europe

Additionally, forecasts for signs of growth are encouraging. Europe will still have to tackle the issue of ensuring that the vaccine rollout stays on target with its timeline goals.

“On the assumption that vaccines become widely available in the summer of 2021 and throughout 2022, GDP growth is projected at 3.9% in 2022, bringing Europe’s GDP back to the pre-pandemic levels,” the IMF said in its latest regional economic outlook.

Europe recently had to deal with a third wave of coronavirus cases and that’s not all. Variants of Covid-19 have also entered the fray.

“There’s an unknown on how quickly the third wave can be defeated, that we don’t have in the forecast and that is certainly a downside risk,” Alfred Kammer, director of the IMF’s European department, told CNBC’s Joumanna Bercetche Wednesday.

“A downside risk is also if the vaccination would be slower than we all currently expect,” he said, before adding that “we need to be ready that the virus is going to surprise us again.”

Another challenge Europe has to contend with is rising inflation. In a time when the economy is healing, the last thing consumers want to see is higher prices.

“Monetary policy needs to remain accommodative as long as prospects for underlying inflationary pressure stay subdued. Central banks should credibly communicate their resolve to head off a premature pick-up in real yields, while allowing temporary increases in prices related to dislocations from the pandemic or volatile commodity prices,” the IMF added.

For more news and information, visit the Leveraged & Inverse Channel.