LIVE MARKETS-Europe's green shoots
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EUROPE'S GREEN SHOOTS
Punxsutawney Phil may have prognosticated six more weeks of winter earlier this month, but Europe is in the midst of an early economic spring, according to Goldman Sachs.
"Recent events point to an improving Euro area economic outlook," writes economist Sven Jari Stehn in a note.
"The incoming data show a pickup in growth, surprising expectations to the upside in recent weeks."
Structural headwinds still face the economy, namely a lack of competitiveness, GS says. This is driven by high energy, labour and regulatory costs, and exposes the EU to rising export competition with China.
That said, economic headwinds are well known, and, according to Stehn, "well priced" by financial markets.
European shares still trade at a large discount to their U.S. peers, but equity flows to the region, from both domestic and international investors, are picking up sharply.
European funds have attracted $13.8 billion of inflows in the last month, according to Barclays, citing EPFR data.
"We remain constructive on European equities and the currency from here," Stehn concludes.
(Samuel Indyk)
EARLIER ON LIVE MARKETS:
STRONGEST MONTH SINCE MAY CLICK HERE
EUROPE BEFORE THE BELL: FUTURES HIGHER AT MONTH-END CLICK HERE
AI WOES AND 'OPEN WAR' CLICK HERE
