Strategists at the BlackRock Investment Institute were also “positive on European shares”, predicting “renewed investor inflows” into the eurozone.
“Europe stands to benefit from global reflation, and we see attractive valuations in cyclical shares,” the team said.
On the fixed income front, the BlackRock strategists were less certain about the direction of travel for European bond yields.
“We are underweight European fixed income. The region’s improving economic outlook may spur higher bond yields and wider credit spreads – especially if markets sense the European Central Bank (ECB) is moving toward winding back its asset purchases.”
However, head of multi-asset at Royal London Asset Management Trevor Greetham said “challenges remain during the volatile summer months, with stock prices likely to dip on heightened geopolitical stress or signs that global growth is coming off the boil”.
Greetham is less confident that Macron’s victory buys the risk rally in Europe more time, which is why he has reduced the equity exposure in the multi asset funds he manages, with a view to buying back at lower prices should markets dip.
“Longer term, we see a continuation of the positive backdrop of recent years, with loose monetary policy and steady growth driving stock prices higher,” he added.
Others, such as Lombard Odier Investment Managers’ chief investment strategist Salman Ahmed, identified potentially higher inflation as something which could derail the rally in risk assets.
Ahmed said: “If anything, the risks lie in the eurozone’s recent set of strong core inflation data.
“This could be nothing more than a sharp rise in package-holiday prices, but it bears watching because much of the optimism around the European recovery depends upon the European Central Bank (ECB) maintaining its dovish stance.”
