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Europe Watch

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President Clinton's political strategist James Carville once claimed that he wanted to be reincarnated neither as the pope nor as a .400 baseball hitter, but as the bond market: "You can intimidate everybody". Well, these days, the European bond market is less a ten ton gorilla than a puppy dog, with auctions oversubscribed, bond yields at historic lows and cross-border capital flows rising.

Significantly, last month saw Greece run a primary surplus (current taxes and other income less current spending) for the first time in, well, decades. And on April 23rd, Portugal issued €750m of 10-year bonds at its first regular debt auction since succumbing to a bail-out in 2011. All this adds up to a Europe that feels as if it's normalizing - with the exception of France who economic indicators look sluggish and whose bond yields are pulling away from German Bunds. Accordingly, in this edition of Europe Watch we focus on the French real estate market to see how investors are balancing the benefits of liquidity against the weak occupational markets.

Source : CBRE Global Investors

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