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Europe could be major beneficiary of Trump woes
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Loading...Global asset managers could start allocating funds to Europe with the euro the big beneficiary, on investor wariness over U.S. politics and stronger relative economic prospects in the euro zone, according to Didier Saint-Georges, managing director and member of the investment committee atCarmignac.
Europe is in a very good spot right now because it has both the economic cycle and political visibility in its favor, he said in an interview in Tokyo on Friday. “I would expect Europe to be a major beneficiary of asset and money flows going forward.”
Carmignac, headquartered in Paris, held assets under management of 60 billion euro ($67 billion) at the end of March, according to its website.
The euro rose above $1.10 for the first time since November this month,buoyed by the election of Emmanuel Macron in France. Inflows into European equity funds reached a weekly record.
The possibility that France and Germany form a stronger partnership to pull together Europe could lead to an even bigger political upside for the euro, Saint-Georges said. In addition, the shared currency could be supported by a less dovish European Central Bank.
Across the Atlantic, the outlook for the U.S. has been clouded with the political turmoil surrounding President U.S. Donald Trump. Investors have raised concerns over his ability to implement policies such as tax and health-care reforms.
“When you look at the momentum of the U.S. economy in terms of consumer spending and corporate investment, the momentum just cannot get strong enough if there is no tax reform,” said Saint-Georges. “If tax reform is delayed until next year or if it doesn’t happen at all clearly, then there is a political issue.”
Source: Bloomberg Pro Terminal
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