The bond and equity markets in Europe are set to outperform the US over the next two years as the two region?s economies diverge from each other, according to a report from ABN Amro.
Hedge fund strategist Julien Garran says that US productivity growth has reached a peak but will continue in Europe as German corporates accelerate cost-cutting and EU accession brings relocation and outsourcing opportunities.
A global slowdown over the next couple of years will hit American companies hard because they have been highly risk averse in a period of strong growth, but will be less problematic for Europe as negative pressure on unit labour costs, particularly in Germany, will keep the euro-economy buoyant.
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