In its report, the Swiss bank said that the upswing should pick up momentum in the coming months and continue into the third quarter of 2012. Apart from the easing of the credit squeeze and the abating euro debt crisis, the main impetus to growth is coming from the improving global economy.
The falling level of risk has triggered a strong rally on financial markets. Equity markets should continue to rise, albeit at a slightly slower pace. Equities should therefore once again outperform bonds in the second quarter, the bank opined.
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The equity market scenario shows potential for Euroland and for emerging market countries. Within the Eurozone, the main beneficiary will be the German stock market. Switzerland’s defensive equity market is likely to underperform.
According to the bank, with the reversal in global economic indicators and the central banks’ generous liquidity provision, the downside risks to the global economy and the financial markets have scaled back dramatically.
Bank Sarasin expects growth to accelerate over the coming months and continue into the third quarter of 2012. Across Euroland there are significant differences between the more robust core nations and the peripheral states. But the worst of the European debt crisis is now over, the bank opined,
Bank Sarasin expects the Euroland economy to revert to a growth path from the second quarter of 2012 onwards.
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By GlobalDataJan Amrit Poser, head of Research and chief economist at Bank Sarasin, said: "We expect the Euroland economy to revert to a growth path from the second quarter of 2012 onwards. The US jobless rate is rapidly falling, which has also resulted in a powerful recovery in US consumer sentiment and will develop into an international growth driver."
