The recent macroeconomic news flow has started to ease some concerns. Euro-zone PMIs have recently been losing some momentum, but clearly remain in expansive territory, both in the industry and in the services sectors.

In the US, manufacturing activity contracted for the fifth consecutive month. However, the latest PMI manufacturing came in at its highest level since September 2015. Separately, the ISM new order and product sub-indices remain above the 50 threshold, signalling a potential bottom in manufacturing activity.

Looking forward, a third monthly improvement in US manufacturing activity, employment in services and stabilisation in Europe will be key. We expect US GDP growth to reach 1.9% this year, followed by 2.4% in 2017. In Europe, the soft macroeconomic data has been generated against a background of rising political risks ("Brexit", migrant crisis). However, we still believe low oil prices, a weak euro, improved credit conditions in the periphery and an accommodating fiscal policy should lead to 1.8% growth by the end of 2016.

 

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