Germany is back. Economic recovery in H2. PMI index rather positive. Inflation below 2%. ECB still flexible. Moderate outlook for bonds. Positive context for the euro and real estate. Return of equity risks.

Key points

• Economic conditions continue to improve in Europe
• Positive momentum continues in 2nd half
• Leading indicators remain moderately optimistic
• Household confidence set to improve
• Inflation falls back below ECB target (+2%)
• ECB to cut rates below 2%
• Positive but moderate outlook for eurozone bond markets
• Euro benefits from renewed confidence
• Securitized real estate benefits from lower rates
• Return of uncertainty for equities over the summer months

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