Where next for the value rally in Europe?

Eurozone equities enjoyed strong performance in the second half of 2016 as investors started to rotate towards value and higher risk areas of the market. Previously, investors had preferred to pay a premium for more dependable growth2 and quality3 stocks. That trend started to turn around in mid-2016 as inflation started to creep upwards. This picked up steam with the US presidential election victory for Donald Trump and the subsequent rise in bond yields.