Euro equities threat.

Investment Adviser, November, 2006

Byline: Morgan Stanley research predicts further US rate rises could trigger a correction

european equities

Two further increases in US interest rates could trigger a correction in European equities, according to Morgan Stanley.

The prediction came in its latest European strategy document, which also predicted that US economic growth would reach a higher-than-expected 2.9 per cent in 2007, despite the recent housing slowdown.

Other analysts have forecast growth as low as 2.4 per cent, for example.

The report cites the bank's US economist, Richard Berner, who made the growth prediction.

He said: "Income generation, lower rates and lower commodity prices will provide an offset to the housing crunch."

Mr...

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