JP Morgan: European Equities Look Attractive

There are still serious headwinds for the European economy, but low inflation, cheap energy and ECB action makes the region compelling, says Stephanie Flanders

J.P. Morgan Asset Management 28 January, 2015 | 11:07AM
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Morningstar's "Perspectives" series features investment insights from selected third-party contributors. Here, Stephanie Flanders, Chief Market Strategist, UK and Europe, J.P. Morgan Funds explains why things are looking up for the eurozone.

The ECB’s QE announcement last week is the latest in some new positives for Europe. Markets needed to hear that the ECB was both willing and institutionally able to pursue its inflation target, however tortuous the path to that objective might be, and that’s what they got. We’re hopeful this could be the start of a positive period for the eurozone economy, thanks to less austerity, steady economic reforms, a turn in the credit cycle, a more pro-active central bank and a falling euro.

Clearly the ECB announcement in and of itself is not the solution to Europe’s many economic problems. But it should put further downward pressure on sovereign bond yields in Europe and globally and contribute to an improving backdrop for Europe’s economy and markets.

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About Author

J.P. Morgan Asset Management  is the investment arm of JPMorgan Chase & Co. and it is one of the largest active asset managers in the world.

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