Europe: investment or trade?

Economists have questioned whether there has been a “fundamental shift” in the economic outlook for Europe, following a significant and positive volte-face in market sentiment. Measured in sterling terms, European equities returned 17% in 2012, outperforming global equities by around 6%. An equally-weighted basket of 10-year GIIPS (Greece, Italy, Ireland, Portugal and Spain) government bond yields fell from 15% at their peak in March to 6.5% by December-end. This reflected a significant vote of confidence in European Central Bank (ECB) president Mario Draghi as he assuaged market fears o...