After a long, cold year, investors are flocking back to Europe

A European recession looked like a no-brainer just a few weeks ago, but that picture has changed dramatically, and investors have started pouring money into the region’s stocks, currency and bonds. Warmer temperatures and well-filled gas storage facilities mean there’s less concern about power shortages and sky-high energy bills. That, along with China reopening its economy at breakneck speed, promises a boost for Europe’s export-oriented economy. JPMorgan has raised its forecast for eurozone first-quarter economic growth to one per cent from a contraction of 0.5pc, echoing a similar move from Goldman Sachs earlier this month. Data from BofA Global Research on Friday showed the first weekly inflow of investor money into European equity funds in almost a year. Markets are picking up those positive vibes. The euro is set for its largest three-month gain against the dollar since 2011, having risen nearly 10pc. European stocks have vastly outperformed their US peers. The euro STOXX benchmark has beaten its US peer, the S&P 500, by over 18 percentage points since September. Morgan Stanley says this is its best outperformance in 20 years relative to Wall Street.