The glow of recovery

Eurozone data continues to surprise on the positive side, a theme that should persist over the first half of the year as the effects of an already steadily improving economy are magnified by the depreciation of the euro and decline in oil prices. And to add fuel to the fire the ECB is launching QE. This backdrop favours EZ equities (which we remain overweight) and non-euro developed sovereign debt, specifically US Treasuries. Outflows to foreign markets will maintain pressure on the euro and we continue to target a move towards parity to US dollar.

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