That contrasts sharply to 2016, when confidence in the trajectory of the economy was much lower. A year ago, just 29% of European investors had a positive macroeconomic outlook, while 61% was neutral or uncertain.
The improving European economy and the stabilisation on the political front, have been the catalyst for the uptick in macroeconomic sentiment across Europe since the start of the year. Since then, fund selectors have had little reason to adjust their expectations. For three quarters in a row, more than 50% of respondents to Expert Investor’s sentiment surveys have had a positive macroeconomic outlook.
Italy is perhaps the prime example of the transformation in sentiment on the continent. Italian fund buyers’ macroeconomic outlook has improved starkly this year, with the percentage of macroeconomic bulls shooting up from just 13% in Q4 ’16 to 52% now.
The increase comes as the Italian economy is finally showing signs of life: industrial output jumped 4.4% year-on-year in August and unemployment has fallen to a five-year low, even as labour market participation rates have been rising.
The UK is the only country where macroeconomic sentiment has fallen since the start of the year. It’s also the only place where the share of fund buyers with a positive macroeconomic outlook is now lower than a year ago. Could Brexit have anything to do with it…?