The dark horse gallops

The thing you just can’t be neutral about is EU, Italian and Spanish restructuring plans. If these programmes succeed, we may be on the verge of a strong EU investment recovery led by areas, like the green economy, where the EU has a competitive advantage. These plans are likely to be boosted by the pick-up of green public investment in Germany after the election. If the plans fail, that will sink Italy, the Next Generation EU Project and quite possibly the European venture itself. For investments there is one certain outcome either way. Higher bond yields. We are short German Bunds and Italian BTPs. For equities, success speaks for being long Eurozone equities and particularly those of green producers, within the context of our overall negative (short) view of global equities. For the euro, we are neutral but watching.

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