Norman Villamin at Coutts says it is "time to buy" eurozone shares. He believes that, with the ECB about to embark upon a serious monetary stimulus - perhaps by imposing negative interest rates or by giving banks greater incentives to lend to small companies - equities in the region should finally get a boost.
News this week has given a further lift to sentiment. Although official figures show that real GDP in the eurozone fell by 0.2 per cent in the first quarter - the sixth successive drop - industrial production figures for March were encouraging. They showed a stronger than expected 1 per cent rise in March - the biggest rise since July 2011 - with output rising even in Spain and Portugal. And Germany's ZEW survey of financial professionals' opinion of the economy posted a small increase, with sentiment remaining well above its long-term average. "We envisage an ongoing very gradual improvement in activity," says Apolline Menut at Barclays Capital
But many economists remain pessimistic about the region's prospects. Martin van Vliet at ING Banks says "any upturn in eurozone industrial activity later this year will likely be sluggish", due to the stronger euro and effects of fiscal austerity. Chris Williamson at Markit notes that purchasing managers' surveys are "registering contraction in all major eurozone countries". And Russell Jones at Llewellyn Consulting adds that the macroeconomic situation is "still deeply troubling" and forecasts that the second quarter of this year will see yet another drop in real GDP. Worse still, he says, the ECB is unlikely to embark upon quantitative easing unless the economy gets even weaker.
All this poses a dilemma for investors. One the one hand, by the time we get truly convincing evidence that the region really is recovering, we might well have missed out on the biggest part of any market rally. And yet, on the other hand, if we buy now there is a risk of disappointment.
