Gavekal Capital: An Update on European Economic Policy Uncertainty

Thursday, February 20, 2014

An Update on European Economic Policy Uncertainty

Last fall, we noted the relationship between positive European equities market performance and a reduction in policy uncertainty:

image

So what does policy uncertainty look like in Europe's largest economies?

image
image
imageimage
image

Overall, policy uncertainty has fallen from highs reached in 2011/2012.  As of now, this indicator would seem to bode well for European equity performance.  So far this year, gains have been modest for most of MSCI Europe with better performance in Denmark, Ireland, and Greece:

image