Growing correlation with US economy

Continental equity markets are up 2.4% in euro terms in the year to date but have fallen 9.2% since the market's peak in early March, driven by the declining Nasdaq as many new economy stocks fall out of favour. Europe's fortunes have become increasingly dependent on developments in the US with respect to the pace and magnitude of further US interest rate rises and the impact on growth. Given the huge uncertainty surrounding these issues, visibility on the direction of European equities over the coming quarter has diminished while the high volatility of recent weeks looks set to persist....