On Tuesday, the latest Europe Fund Manager Survey conducted by Bank of America (NYSE:BAC) revealed a significant shift in sentiment regarding the European economy.
A net 50% of respondents now expect a stronger European economy over the next twelve months, marking a substantial increase from the net 21% who held this view last month. This level of optimism has not been observed since July 2021.
Despite the growing optimism, a plurality of 36% of the survey participants still anticipate that European growth will decelerate in the near term due to the impact of monetary tightening. However, this figure represents a sharp decline from the 83% who believed this in January. Additionally, a net 57% of respondents consider the current monetary policy in Europe to be overly restrictive, which is the highest percentage since 2008.
In contrast to their European outlook, fund managers have mixed expectations for the US economy. Half of the respondents expect US growth to remain robust, supported by a resilient consumer sector. Nevertheless, 26% of the survey participants predict that US growth will diminish in response to tight monetary policy.
The survey also highlighted changing expectations for the global economy. Currently, 54% of fund managers believe that a soft landing is the most probable scenario for the global economy, down from 62% who thought the same last month.
Meanwhile, the proportion of those in the 'no-landing' camp, which suggests a more turbulent economic scenario, has risen to 36% from 23% in the previous month.
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