European Markets with Peter Schaffrik - May

Since our April edition, markets have started to reverse some of the ‘Divergence’ implied between US and European markets which we think is fully justified. In today's edition, Peter examines where we stand in terms of growth and inflation expectations and actual out turns relative to those expectations. We continue to argue against wide spread de-coupling between the US and Europe and see central bank rate cuts roughly in line with market forwards. We thus see no major bond bull marked developing even though rate cuts will commence soon.