The big threats to Europe recovery

ON EUROPE

The Chinese government spent most of last year trying to engineer a slowdown in growth and inflation.

Data so far this year suggest that slowdown is upon us. We hope to see signs that this slowdown will turn out to be a “soft landing” and the export machine in Northern Europe will roar back to life. This resurgence is relied on to reward those sectors in Europe heavily leveraged to the China trade. The situation remains true for the impact of the US economy on Europe. If the macroeconomic data coming out of America stays strong, as it has been in the first few months of this year, European firms heavily leveraged to US demand will see improving sentiment towards their earnings outlook....