BofA Global Research-European Fund Manager Survey Bullish on Europe, less bearis...-116000101

Trading ideas and investment strategies discussed herein may give rise to significant risk and are not suitable for all investors. Investors should have experience in relevant markets and the financial resources to absorb any losses arising from applying these ideas or strategies. >> Employed by a non-US affiliate of BofAS and is not registered/qualified as a research analyst under the FINRA rules. Refer to "Other Important Disclosures" for information on certain BofA Securities entities that take responsibility for the information herein in particular jurisdictions. BofA Securities does and seeks to do business with issuers covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. Refer to important disclosures on page 24 to 25. 12842147 European Fund Manager Survey Bullish on Europe, less bearish on global Global growth pessimism is fading but tariff risks remain A net 46% of survey participants think that the global economy is set to weaken over the coming year, down from 59% last month and a record 82% in April, on the back of a fading tariff threat. A soft landing is once more becoming consensus, with the scenario seen as the most likely outcome for the global economy by 66% of investors, up from 37% in April, when investors were bracing for a hard landing. Investors regard a strong US consumer as the biggest upside risk for global growth, while the Trump policy mix is seen as the largest downside risk. A trade war that triggers a global recession is considered the biggest tail-risk by around half of the respondents and close to two-thirds think only very little of the tariff shock is already in the price. German stimulus underpins European growth optimism A net 29% of respondents expect stronger European growth over the coming twelve months, little changed from last month and keeping the gap to global growth expectations close to the recent record highs, helped by expectations for German fiscal stimulus. However, when asked directly whether Europe’s economy and markets can decouple from a softening global growth backdrop, a growing number of clients express concerns about the fallout from US policy headwinds. Investors are sanguine on the European inflation outlook, with 29% seeing scope for European inflation to decline over the coming twelve months, while a net 13% expect inflation to rise globally over the same period. Bullish on EU equities – outright and relative to the US A net 34% expect upside for European equities over the coming months, broadly unchanged from last month, while the net share expecting upside over the coming twelve months has risen back to the February high of 75%. A net 61% expect 12-month forward EPS in Europe to rise, up sharply from 38% last month. A net 34% say they are ov

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