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BNP Paribas Investment Partners believes that European assets may be at a turning point compared with US assets. But the global manager thought the same thing about this early last year too. So its optimism is cautious.

Visiting Australia and New Zealand last week, Daniel Morris, the firm’s London-based investment strategist, said that the earnings prospects for European companies finally appeared to be better than those in the US, albeit from a lower base.

“Valuations are high in the US,” he said. “While all the major regions are expanding, Europe is doing better than anywhere else. It’s a long-awaited recovery. Things are looking good on a global basis but we think they are relatively better in Europe.”

But the growth outlook is varied across the Eurozone countries, with Ireland, Spain and the Netherlands leading the charge in terms of GDP growth forecasts and Italy, Finland and France being the laggards.

Political risks abound around the world, Morris said, and it was hard to know where they were greater – “probably in Europe”. Credit growth was still low, although rising, but in Italy and Spain it was still negative.

“What happens when the EU tapers and interest rates go up?” he said. “What is the risk that credit growth falls? But the EU is going to taper because of the politics of the situation.”

He noted that the US was unwinding its QE (quantitative easing) without its economy collapsing.

Earnings-per-share growth rates for Europe as a whole overtook the US early last year and overtook growth in emerging markets companies around September.

Japan was continuing to benefit from a weak yen but the recent rapid growth in its corporate earnings was probably unsustainable, Morris said.