Why Eurozone equities are well placed to make gains on their global peers

Headwind from euro strength should abate

Eurozone equities have started 2018 like they ended 2017, by struggling relative to their global peers.

The region is still stuck in the middle between strong fundamentals and a strong euro. The latter is weighing heavily on the internationally-exposed eurozone equity market that derives more than half of its revenues from abroad. But the fundamentals are simultaneously as strong as ever.  Growth is tracking close to 2.5%, the European Central Bank remains cautious because inflationary pressures are all but absent, and corporate earnings are growing at a robust pace. In fact, as evidence that the fundamentals do still matter, we only need to look at the performance of small-cap eq...