Deutsche Bank said euro-area growth has held up better than expected after the latest energy shock, citing improving activity indicators and early signs of a new investment cycle.
The bank still flagged a tougher next phase as the ECB keeps tightening, forecasting a September deposit rate of 2.50%, with 2.75% a meaningful risk and 3.00% likely restrictive.
Higher gas prices, a widening AI trade deficit and weak competitiveness were cited as key drags that could test that resilience.
France was identified as the main sovereign-bond vulnerability as higher funding costs collide with heavy debt loads and a crowded election calendar across Europe.
Stronger digital investment, well-capitalized banks and European policy backstops were highlighted as buffers against a broader market destabilization.