French Elections Have Reshaped Investor Views on Europe

June 12, 2017 Share Print 0

The threat of populist governments, Brexit negotiations and a stagnant economy painted a dark picture for Europe going into 2017. However, half way through the year and investors see a renewed political willingness to reform and a growing economy offering several opportunities ahead.

“This was supposed to be the year of political risk events haunting Europe with all the uncertainty and apprehension that goes with this,” Jan Randolph, director of sovereign risk at IHS Markit, told CNBC via email.

“As it is turning out however, the euro zone economies are surprising in the upside: higher GDP growth is good for stocks generally; but I think that bar the recent U.K. elections; there hasn’t really been any major political upset; again supportive of stocks and slightly net negative for bonds,” he added.

Data released last week showed the euro zone grew at its fastest pace since 2015 in the first quarter of this year. Unemployment and employment data has also improved over the last few quarters. As a result, the European Central Bank updated its forward guidance to include lower risks to economic performance after a monetary policy meeting last Thursday.

via CNBC

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Bio
Twitter
Google+
Latest Posts

Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.