Why European equity valuations appear attractive

European equity markets have struggled to perform since the start of 2018 owing to the relaunch of trade wars by US President Trump, coupled with uncertainty surrounding Brexit.

In addition, myriad European economic data has disappointed of late. While the European consumer has remained resistant to external risks, manufacturing data in Europe has deteriorated considerably. The eurozone Purchasing Managers Index (PMIs) for manufacturing and the German IFO Business Survey, two broadly tracked economic indicators, have been declining since the start of 2018.   On the positive side, wage growth in Europe has increased and unemployment remains low in Germany, but has declined in Italy and Spain. Eurozone GDP growth has started to stabilise and is showing signs of...