All’s quiet on the European front, if stock traders are to be believed.

25.09.2017 / 10:05

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With Germany’s election -- the fourth major one on the continent this year -- now out of the way, equity trading is the quietest since 2000 and the region’s volatility index is poised for its biggest quarterly retreat in 14 years.

Investors appear relaxed about risk again in what Barclays Plc has called an “uncomfortable” bull market, even with potential for disruption by everything from political turmoil in Spain and the U.K.’s messy Brexit negotiations to Italy’s upcoming vote next year. Funds tracking Europe have attracted some $33 billion in 2017, shaking off a short-lived panic over the extent to which a strengthening euro will hurt corporate profits.

The evidence is there: the VStoxx Index is down 32 percent in the third quarter and near a record low.

To some, investor mood signals complacency. Strategists at HSBC Holdings Plc have been calling for a correction since early August, saying that traders are pricing in virtually no negative news. European stocks haven’t had a drop exceeding 10 percent in their latest 15-month bull run -- one of the longest periods since the global financial crisis.

Source: Bloomberg Pro Terminal

Junior Trader Stefan Panteleev

Varchev Traders

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