We have a lovely custom here in the Kames office of buying chocolates for the team after we return from our holidays. Occasionally one of the healthier team members veers into the natural sugar space, but in general the tried-and-tested combination of cocoa and sugar goes down the best. Summer is a good time for treats, many from far-flung parts of the world, but Europe remains our collective clear favourite.

Europe was an uncertain place last summer. The UK had just voted to leave the European Union and the whole of the region suffered a jolt of confidence as an uncertain future beckoned. A year later, the EU has recovered from the shock, weathered the subsequent political storms and the economy is growing stronger quarter by quarter, whilst the UK languishes.

Since the election of French president Emmanuel Macron, business and economic confidence has strengthened across the EU and is now beginning to be reflected in the ‘hard ‘data. This morning, first estimates of GDP growth in the second quarter for 2017 were released for France, Spain, Austria and Sweden, all higher than expected. The French economy grew at 0.5%, the Spanish 0.9%, the Austrian also 0.9% and the Swedish a punchy 1.7%. Their annual growth rates are 1.8%, 3.1%, 2.2% and 4.0% respectively. This augurs well for releases from other countries for the same period and the Eurozone as a whole may have grown close to 2.2% over the last 12 months. By contrast the UK’s growth rate was 0.3% in the second quarter and 1.7% over the last year.

This renewed confidence is being felt across the whole of the continent – even Greece has recorded an increase in GDP in the first quarter of this year. Unemployment across the region is falling while bank lending is growing moderately. The difficulties of the past five years are receding. This is being reflected in the strength of the euro, not only against the pound (some may find their holidays a touch pricier this year) but also against the US dollar and latterly the Swiss franc. The Swiss franc has been widely used as a safe-haven currency over recent years, used to gain European exposure while avoiding the euro. The currency has appreciated substantially over recent years to much protest from the Swiss. This week the President of the Swiss National Bank, Thomas Jordan, reiterated that in their view the currency was overvalued and that they would do all they can to weaken the currency by keeping monetary policy accommodative and by intervening if necessary.

We fully expect the European economic renaissance to continue, and if it does we may all be swapping our post-holiday Belgian bonds, as well as chocolates, for Swiss ones in the months to come.

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