The euro is being pulled lower by interest rate differentials, political risk (ISIS) and strife within Italy’s banks. It is not difficult to see the euro tumbling to the trough of October 2000 ($/€0.83). The May 2017 election in France remains a big risk for the euro: a win for Ms Le Pen could push the euro to new lows. However, the recent survey data in France have been encouraging.
Indeed, a win for Mr Fillon could spark a strong recovery. The 2016 ranking of the 500 fastest growing technology companies by Deloitte has been released for Europe, Middle East and Africa. France was again top. If Mr Fillon succeeds next May, France will be well placed to lead a successful tech-led recovery across the Eurozone. The recent improvement in a number of business surveys suggests the prospect of a change in political leadership in France has galvanised company executives already.
Summary
- Cyclical indicators turning higher too
- UK holds on to second place
- A strong France neutralises risks of Italy/Greece pulling the Eurozone further behind US, China, Japan, South Korea
