European equities finally hit their QE-fuelled sweet spot

Even if Greece finally leaves the single currency, the financial shock will be both manageable and short-lived as European equities have already started their QE powered rebound, says Paul Wild, manager of the JOHCM Continental European fund

The prospect, and now reality, of quantitative easing (QE) has lit a fire under European stock markets in 2015. European equities have notched up their best start to a year since 1997, led by the sizzling DAX. QE is already working its magic on eurozone sovereign bond yields too: Italian 10-year bond yields were down a massive 26 basis points in February; Portuguese debt traded at a yield lower than 10-year US treasuries for the first time since 2007; and Germany issued five-year paper at a negative yield. The stars are certainly aligned for European equity investors at present. Evide...