Economics

There is little doubt the tide is turning for one of the most unloved regions. Investor sentiment towards Europe in July, as measured by the Bank of America Merrill Lynch fund manager survey, was at its lowest level since 2003.

With inflation a growing possibility, what are the implications for equities?

Having spent the past six weeks trading in a tight range of 100 points around 4,400, the UK FTSE 100 has recently fallen back to its end of April levels.

Credit markets have staged an exceptional rally in recent months. The US corporate bond market, for instance, registered record relative returns compared to US Treasuries in April and May (based on the Barclays Capital US Credit Bond Index).