- European Commission’s consumer confidence index at minus 19 points in February.
- Europe’s double-digit equity market returns so far this year.
- Economic data sharply surprising expectations to the upside.
- China's reopening likely to be one-off rather than sustained support for European growth.
- Monetary backdrop in Europe getting significantly tighter at a time when global liquidity also being withdrawn.
Beware the European optimism trap
Beware the European optimism trap: many of the factors that boosted the region’s equities are likely to fade as 2023 progresses. Global liquidity also being withdrawn.