European banking stocks are ready for a rebound, Barclays strategists says

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European banks are finally showing signs of recovery and investors should be looking to reduce their bearish positioning in the beleaguered sector, according to Barclays strategists.

In a note published Wednesday, Barclays' European banking and European equity teams projected that the stabilization of euro zone economic data and bond yields may bolster the banks, which have the most positive correlation to these two metrics of all European sectors.

It added that in the meantime, bond yields and inflation expectations are "trying to find a floor," which gives a breather to value stocks, those which trade at a lower price relative to their fundamentals.

 

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