The current economic environment is set to drive European earnings higher in 2017 making equities in the region more attractive than their U.S. counterparts, strategists at Goldman Sachs told CNBC on Monday. Expectations of a further weakening of the euro zone's single currency would also be supportive of European earnings.
"We have the currency down, so the mix seems to us between real growth, better global growth, low inflation, easy (monetary) policy," Garzarelli added.
Despite a heavy political calendar in Europe and expectations of rising support for populist parties across the region, Goldman Sachs seems confident that there are opportunities arising amid such an environment. Many economists and investors have highlighted the raft of elections in Europe as their main concern for 2017. However, Credit Suisse said in a note on Monday that political risks were "overstated."
"First of all, we think it unlikely that the Dutch, French, German or (possible) Italian elections will deliver more extreme, populist governments," Credit Suisse analysts said in the note.
"And secondly, the euro area economy proved resilient to political (and other) shocks in the last couple of years and should remain so," the bank added.
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