Strongest capital flows since 2015 – Europe is back on the map

The Gift That Keeps on Giving

European stocks are rising steadily as economic data exceeds expectations, financial conditions ease, and interest rates are being cut. Domestic investors are buying again, and a long-awaited political boost in Germany may reverse years of stagnation. When the macro-tanker turns, you don’t want to get off too early.

European MoMo

Europe’s Newly Discovered Love for Itself

Domestic investors are once again buying European stocks after a long period of being net sellers.

A Decade of Strength

We are seeing some of the strongest capital inflows into European equities since 2015.

Europe Keeps Surprising

Economic surprises are trending up in the EU, but are trending down again in the US.

Markets Expect More Cuts

A 25 bps cut, while Lagarde hints at the nearing end of the monetary tightening cycle. Markets expect more.

Easing Financial Conditions

Financial conditions remain tight but have been easing since early April.

Pause and Two Cuts

Financial conditions remain tight but have eased since the beginning of April.

Inflation Expectations Decline

Downward revisions to HICP forecasts align with recent signs of further inflation drops.

Germany Begins to Deliver

“Recent developments in Germany are gradually positive in our view, addressing investor skepticism about domestic politics and US tariffs. The German cabinet approved a €46B package, including an ‘investment booster’ for capital spending (starting this year) and corporate tax relief (effective 2028). On tariffs, Friedrich Merz had a successful meeting at the White House… While the German market already shows strong returns YTD, we maintain an ‘overweight’ in our European strategy. Within Germany, we prefer mid-sized companies – MDAX is catching up, trading at a historically unusual discount to large caps, and will benefit more from domestic fiscal stimulus.”

The Only Way Is Up…

Germany hasn’t grown in years and avoided recession only through increased public sector employment. From here on out – the only way is up…