Sunday, September 20, 2015

Economic Summary for the week ended 14th Sep 2015

Eurozone GDP was revised up this week showing that the eurozone grew 1.5% year on year in the second quarter. The underlying data showed a continued recovery in domestic demand and net exports.

Whilst the European Central Bank recently revised down their GDP growth forecasts slightly, they still expect 1.7% growth in 2016. They have also highlighted that they are willing to expand their Quantitative Easing (QE) programme if necessary to support growth and inflation. Even without further easing, money supply has been picking up strongly and suggests that GDP growth should remain well supported. With money supply and the economy picking up, and the EuroStoxx 50 down near where it was when Draghi first announced QE back in January, this would suggest that European equities have upside potential from here.

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