Europe

It is easy to get lost in the many headlines proclaiming impending doom for Italy's banking system (especially following the 'no' vote in the constitutional referendum), or in the complex details of state aid and debt burden sharing.

This year has not been a good one for economists trying to delineate the fortunes of the UK economy. 2017 could be worse.

Fund managers have warned of short-term volatility following Italy's vote against constitutional reform in this weekend's referendum, which they say could "exert a baleful influence" on the country's struggling banking sector.

The euro fell to levels last seen in March 2015 last night as Italian Prime Minister Matteo Renzi said he would resign after suffering a worse defeat than expected in the country's referendum on constitutional reform.

For over two decades, the pace of Italy's economic growth has lagged that of its major continental peers, writes LGIM's Justin Onuekwusi.

Despite political upheavals, the current environment of low growth and low interest rates should be broadly positive for equities in Europe.

Amid widely-held short positions in Italian debt

Cyclicals beginning to outperform

Investors are taking a cautious approach to the upcoming Italian referendum on constitutional reform, but say the market consequences of the vote will not be as serious as the Brexit vote or US election, whatever the outcome.

The luxury industry has entered a phase of consolidation. Luxury goods companies have to rethink strategies as the implosion of the gift-giving bubble, the store openings euphoria, and shifting consumption patterns have led to an increasingly competitive...