Europe Will Underperform the Global Market Next Year: BofAML’s Raedler

The video discusses the inflows since June 2017 and questions the predictive power of such statistics for future performance. It highlights the poor growth in Europe since 2018, with signs of improvement due to domestic drivers and a weakening global growth backdrop. Despite optimism, Europe is expected to underperform the global market due to mild global growth and a strengthening euro. Two potential factors could change this: a strong global acceleration or euro weakness not driven by economic factors.

What is the main question regarding the recent inflows into Europe?

• Whether they indicate future performance

• If they are sustainable long-term

• If they are the largest ever recorded

• How they compare to US inflows

What is a key reason for the predicted underperformance of Europe in the global market?

• High operational leverage and structural growth weakness

• Strong US dollar

• Rising interest rates in Europe

• Increased competition from Asia

What could potentially help Europe outperform in the global market?

• A powerful global economic acceleration

• A strong euro

• Increased tariffs on imports

• Higher interest rates in Europe

What is one factor that could lead to euro weakness without economic decline?

• Higher inflation rates

• Dramatic additional monetary easing

• Political stability

• Increased exports

What is the ECB's current challenge in influencing the euro's performance?

• Strong economic growth

• Political instability

• High inflation rates

• Limited firepower for further monetary easing