19
Jun
Is Europe’s GDP growth rate of +0.4% sustainable?
Consumption picking up (+0.5%). PMIs still on the fence. Long-term rates at historical low. Euro relatively stable. High risk premiums on European equities (27%).
Key points
- European growth stronger than expected so far this year
- GDP up +0.4% (+1.2% yoy)
- Household consumption up +0.5%
- Leading indicators may have turned a corner and seem to be improving
- Manufacturing still struggling
- Industrial output down -0.5% in April
- Slight improvement in confidence
- Euro relatively stable
- Complicated transition at the ECB
- Avoid another recession at all costs
- Euro yields continue to fall
- Ten-year rates at historical low (-0.26%)
- High risk premiums on European equities (27%)
- Faster growth is necessary for European share outperformance
