Euro-Area Crisis Having Declining Impact on Global Markets

The S&P 500 is trading close to a multi-year high, and the U.S. data picture appears to be improving. This may seem strange in the face of the ongoing economic crisis in Europe, even if there has been some very recent evidence of stabilization. Against this background, it is natural to ask, “Does Europe matter?

Before bond markets in Italy and Spain came under pressure last summer, the expectation for euro zone growth in 2012 was close to 2 percent. The assumption was that a moderate recovery would persist, driven especially by quite strong growth momentum in Germany.

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