European equities: will they ever bounce back?

European shares are unloved right now. For two months running, fund managers surveyed by Bank of America Merrill Lynch have named “short European equities” as the most crowded trade, while many remain underweight the region.

​​​​​​​European economic risks primer: Richlandia and Poorlandia

The potential breakup of the euro has been a permanently armed grenade under the bed of the global economy for almost two decades. The recent Italian elections driving yields up and the euro down reminded allocators that European risks have never really dissipated. Every time a eurozone election goes the way of populists, threats to the cohesion of the group increase and the discipline required to maintain the monetary union becomes harder to sustain. Meanwhile, the euro’s status as a global reserve currency is constantly undermined.