Europe

The European Union began 2018 in reasonable economic condition. Growth in the fourth quarter of 2017 had reached 2.8% annually, matching the best since the financial crisis. Unemployment in January was down to 8.6% from 9.6% a year earlier. Industrial production in December 2017 was 5% higher on the year. The ECB had cautiously begun to reduce its bond purchases which it proposed to terminate at the end of the year citing the improving economic picture.

Two things dominated the financial world this 2018: political turmoil and fears of slowing economic growth. The first was quite foreseeable with Brexit and Trump´s victory in the US but the second dawned on markets like a cold shower in the second half of the year. It was not far ago when EU's growth hit record highs, according to Markit, with business activity shrinking to its lowest pace of growth in over four years in December.