Expansion

The Eurozone economies are expanding again according to the leading indicators. The Purchase Manufacturing Index ( PMI ) published yesterday is in expansion territory ( above 50 ) and rising at the fastest pace since May 2022. This confirms again that Europe is economically more resilient than many sell-side strategists had feared. The energy crisis is abating due to the milder winter, disappearing supply-side bottlenecks due to easing Covid restrictions and early signs point towards peaking inflation. While certainly positive news, it is too early to cry victory as the situation remains fluid and a lot will depend on the central banks and the further evolution of the geopolitical situation. In the meantime, our  approach remains to focus on solid undervalued businesses for the long term.