The view from Pickard
EUROPEAN OUTLOOK
07.37
The Purchasing Managers’ Index data from Europe and the UK yesterday underlined the ongoing economic weakness of the region. The big question is which will have the biggest effect in the near term: the major liquidity operations of the leading central banks or economic fundamentals? There is a growing body of opinion that the lack of economic growth will trump the positive effects of the central banks’ intervention. My view, however, is that the latter will hold sway for now. I am betting on the rally in risky assets to resume in style in the fourth quarter.
Trading in the DAX and FTSE was deceptive yesterday. Both indices surged, only to give back a goodly portion of their intraday gains. I remain bullish on the prospects for a more sustained revival in both markets, however.
Click here for analysis of some leading equity indices.