When the European Central Bank (ECB) meets today in Frankfurt, they will have positive market data to contend with from Q1, as most European equity markets have closed out a positive overall first quarter as shown in the Russell Indexes table below.
The Russell Eurozone Index, comprised of all EU member nations that have adopted the euro, returned 3.7% in the first quarter. Yet beneath this moderate growth figure lie strong surges within Eurozone Index country constituents Portugal (+16.4%), Italy (+15.8%), Ireland (+5.8%), Greece (+15.7%) and Spain (+5.8%).
In contrast, the UK, as part of the more broad Russell Developed Europe Index, fell by (-0.5%) over the same period. The Russell Developed Europe Index returned 2.9% in the first quarter.
"While there is general speculation in the Eurozone about the likelihood of quantitative easing by the ECB, we believe this is still an unlikely prospect," said Wouter Sturkenboom, Investment Strategist for Russell Investments Europe. "We expect Mario Draghi to continue to take a 'wait and see' stance, taking into account such factors as the ongoing economic recovery and improving sentiment, fall in peripheral spreads and strong capital inflows into the Eurozone."
---------------------------------------------------------------------------- Index / Index Country Constituent 2014 YTD as of March 31 ---------------------------------------------------------------------------- Russell Eurozone Index 3.7% ---------------------------------------------------------------------------- Russell Developed Europe Index 2.9% ---------------------------------------------------------------------------- Portugal 16.4% ---------------------------------------------------------------------------- Italy 15.8% ---------------------------------------------------------------------------- Greece 15.7% ---------------------------------------------------------------------------- Ireland 5.8% ---------------------------------------------------------------------------- Spain 5.8% ---------------------------------------------------------------------------- Switzerland 5.0% ---------------------------------------------------------------------------- Sweden 4.4% ---------------------------------------------------------------------------- France 3.5% ---------------------------------------------------------------------------- Norway 2.7% ---------------------------------------------------------------------------- Netherlands 2.3% ---------------------------------------------------------------------------- Finland 1.3% ---------------------------------------------------------------------------- Austria 0.7% ---------------------------------------------------------------------------- Germany 0.3% ---------------------------------------------------------------------------- Luxembourg -0.4% ---------------------------------------------------------------------------- United Kingdom -0.5% ----------------------------------------------------------------------------
Source: Russell Investments. Total returns, denominated in euros.
