Macro summary
European equities’ relative outperformance versus the US, which defined the first two months of the year, reversed through Q2. Having led by over 500 basis points through February, the peak of the “de-Americanisation” trade, Europe gave back its relative advantage as the March sell-off cleared and risk appetite returned.
From the March-end low, the recovery favoured the US and Asia-Pacific. The S&P 500 rallied over 16 percentage points from its trough, while APAC surged nearly 26 percentage points. Europe’s recovery was steadier but more muted. By the end of June, the STOXX 600 had returned +6.7% year-to-date versus +8.5% for the US and +18.0% for APAC, leaving Europe as the relative underperformer despite being the consensus overweight entering the year.
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