Welcome to Thoughts on the Market. I'm Graham Sekker, head of Mongastani's European and

UK equity strategy team. Along with my colleagues, bringing you a variety of perspectives, I'll

be talking about our latest thoughts on European equities, and why we see further out performance

from the region over the second half of the year. It's Tuesday, June 15th at 3pm in

London. Over our last couple of podcasts, we've been

arguing that investors have been under appreciating the investment case for European equities, particularly

in light of the improving macro backdrop as the region reopens and economic activity

rebounds. In recent weeks, it is becoming apparent that more investors are beginning to positively

re-appraise their view on the region, and we are now seeing a healthy increase in equity

flows, which are running at their best levels in three years. A particular encouragement

are an increase in inflows from US-based investors, who tend to provide a healthy, marginal bid

for European stocks, boosting both absolute performance and general liquidity considerations.

With global investors structurally underweight Europe, there is ample scope for the recent

run of inflows, which should be counted in weeks rather than months, to persist for considerably

longer if the investment narrative remains attractive. In this context, it is important

to highlight that today, Marx's significant historical moment for European capital

markets, with the region issuing its first joint liability EU bonds as part of the EU Recovery

Fund that was agreed last year. IE, this vehicle is now effectively live, and these new bonds

represent a large and permanent Euro-denominated asset class. The proceeds from these bonds

could start to flow into individual nation's coffers over the next one to two months, ultimately

supporting the longer-term economic outlook over the next few years. Given the broader MS

macro team has recently taken a more subdued view on global risk assets recently, we consider

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