The European Central Bank returns and plans to raise rates | News

Advertisement. Finally! The European Central Bank (ECB) is backing down from its rigid stance. For the first time in eleven years, it wants to raise key interest rates in July, initially probably by 0.25 percent, and perhaps also by 0.50 percent. Further rate hikes are to come. “It’s not a step, it’s a whole journey,” said ECB President Christine Lagarde. Change is urgently needed. As it does not matter whether it is at the distributor or during everyday purchases, the price increase is an excessive burden for us consumers.

The central bank’s relentless reassurances that price increases are temporary and that inflation will soon be within the 2% target are also a thing of the past. Inflation in the euro area is likely to amount to around 6.8% this year, and in 2023 the price increase is expected to drop to 3.5%, according to ECB forecasts. Deutsche Bundesbank expects even higher figures in Germany, expecting an inflation rate of 7.1%. this year and 4.5 percent. next. According to the president of the Bundesbank, Joachim Nagel, inflation this year will be even higher than at the beginning of the 1980s. It is high time, then, for the ECB to take countermeasures and end its ultra-loose monetary policy.

What does this mean for investors? In any case, investors can expect zero and negative interest rates to end soon. However, buying long-term bonds doesn’t make much sense in times of rising interest rates, and interest rate hikes are known to be poisonous to the stock markets. Structured securities, such as Tresor limit bonds, open up in this environment the possibility of not investing directly in stocks or classic bonds. Thanks to them – as in the case presented below – the repayment of the nominal amount can be guaranteed, and the amount of income depends on the future performance of the exchange up to the set upper limit (cap). The turmoil in the stock markets in recent months has provided attractive conditions, while at the same time there is ample time for a lasting recovery in the stock markets.

128% Cap and 100% Capital Protection *

this DekaBank EURO STOXX 50® treasury strip with an attachment 07/2029 (WKN DK06PA) fully contributes to the positive performance of the EURO STOXX 50® Index at maturity after seven years up to its maximum level. This limit is set at 128 percent of the original value (index closing price July 1, 2022). The repayment can therefore be up to EUR 1,280.00, which corresponds to a maximum yield of 28.00 percent compared to the nominal amount invested (EUR 1,000.00). If the EURO STOXX 50® Index is quoted below its initial value on the valuation date (29/06/2029), the 100% principal * protection ensures a repayment of the nominal amount of EUR 1,000.00.

In any case, you are only participating in the positive development of the underlying asset up to the limit. As with any bond, the issuer’s risk should also be considered. This means that in the case of Tresor bonds, there would be a risk of loss, even a total loss, in the event of the insolvency of DekaBank.

The subscription is valid from 13/06/2022 to 07/01/2022, with the possibility of extension or shortening.

* End-of-period capital protection by the issuer and based on par

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Disclaimer: The information contained in this document does not constitute a recommendation to buy or sell a financial instrument and cannot replace individual advice. This advertising information does not contain all relevant information about this financial instrument. Before making an investment decision regarding certificates, potential investors are advised to read the securities prospectus in order to fully understand the potential risks and possibilities of an investment decision. Approval of the prospectus by a competent authority should not be interpreted as endorsement of the securities offered. The prospectus and any supplements can be found at https://www.deka.de/deka-gruppe/wertpapierprospekte under “EPIHS-I-21”, final terms at https://mmscache.deka.de/ DE000DK06PA3_FT.pdf to download. All information on securities and up-to-date background information is also available free of charge from Sparkasse or DekaBank Deutsche Girozentrale (www.deka.de), 60625 Frankfurt. You are about to buy a product that is not simple and may be difficult to understand.

Where rates / prices are mentioned, they are not binding and do not serve as an indication of negotiable rates / prices. The values ​​given here are intended to explain the payout profile of this financial instrument. Values ​​are not a reliable indicator of future performance.

Selling Restrictions: Reference is made to the special selling restrictions and distribution laws of the various jurisdictions. In particular, the financial instruments described in this document may not be offered for sale or sale in the United States or to United States persons.

The EURO STOXX 50® index and the trademarks used in the index name are the intellectual property of STOXX Limited, Zurich, Switzerland and / or its licensors. The Index-based Note is in no way sponsored, endorsed, sold or endorsed by STOXX and / or its licensors, and neither STOXX nor its licensors will have any liability in this regard.

A great issuer! DekaBank with the best primary market. More information: www.scopeexplorer.com/scope-awards/certificate

Hussam Masri is responsible for the expansion and development of the strategically important division “Private Banking and Wealth Management” and in this function he is responsible for the units of Private Banking Sales, Wealth Management, Private Banking Sales Strategy, Product Specialists and business and marketing certificates for the responsible Deka Group.


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