iShares MSCI Germany ETF

EWG

Market cap $1.77B

The economists said those losses could be recouped if eurozone members lowered barriers to trade in goods and services within the currency area.

The ECB is very unlikely to raise its key interest rate this year, with a weaker dollar among a number of potential developments keeping eurozone inflation low, Bank of France Governor Francois Villeroy de Galhau said.

Germany's export-driven economy faces severe headwinds from US tariffs, euro appreciation, and lost access to cheap Russian energy. German trade surpluses are shrinking, with 2025 exports to the US projected down 7% and overall trade surplus far below 2024 levels.

European stocks are expected to open broadly higher on Tuesday as investors track developments following the U.S.' ouster of Venezuelan leader Nicolas Maduro.

iShares MSCI Germany ETF (EWG) remains a hold, with valuation attractive but technicals and seasonality neutral. EWG's 2025 gain is less impressive after adjusting for the euro's 15% rally; relative strength to SPY has declined. The ETF is heavily weighted in cyclical value sectors, with Industrials and Financials comprising nearly half the portfolio.

European stocks are expected to open in broadly flat territory on Tuesday as markets continue to struggle for direction in a holiday-shortened trading week.

The Stoxx 600 notched a new record closing high, buoyed by Copenhagen-listed Novo Nordisk.

Eurozone consumer sentiment unexpectedly weakened in December despite cooling inflation and economic resilience against tariffs, a monthly indicator showed.

Germany is on course for the highest corporate insolvency count in more than a decade, raising fresh questions about the resilience of the nation's largest listed companies — and the ETFs that track them.

Inflation in the euro zone faces downside risks in the medium term, even as price growth has returned to the ECB's 2% target, European Central Bank policymaker Olli Rehn said, according to a report in a magazine on Saturday.