Eurozone improvement is an opportunity and a threat
As periphery yields continue to decline, Eurozone-exposed economies such as the Nordics and the UK may finally be able to hope that the Eurozone’s performance will boost rather than drag their own economies. For a Scandinavia still swimming in surpluses and disinflation woes, euro strength and rising external demand is more than welcome; for the UK, which possesses one of the worst deficit (current account and fiscal) positions in Europe, a Eurozone strong enough to redirect capital flows away from the UK is as much a threat as opportunity.
Read the full report: UBS