Still Some Green Shots From Europe
The Eurozone economy is not running anywhere, but there have been some positive signs recently
The Eurozone economy has been in a tough spot after the cool-off which lasted more than a year. The European Central Bank has turned pretty dovish again and remains so even after cutting deposit rates to -0.50% in September and restarting the QE bond purchase programme in November.
Just a while ago we heard rumours from Bloomberg that the European Commission will say in the document – due to be published on 5 February – that the euro area is doing their fiscal policy wrong and that it doesn’t compel growth in the region. Although, we have seen some green releases from the economic data in recent months. Today the employment report was a bit better than expected and the confidence report was sort of mixed, as below:
- Eurozone December unemployment rate 7.4% vs 7.5% expected
- November Stod at 7.5%(unrevised)
- Eurozone January final consumer confidence -8.1 vs -8.1 prelim
- Economic confidence 102.8 vs 101.8 expected
- Industrial confidence -7.3 vs -8.8 expected
- Business climate indicator -0.23 vs -0.20 expected
- Services confidence 11.0 vs 11.3 expected
A bit of a mixed report, but the standout detail is that economic confidence is seen improving once again – highest level since August. That reaffirms improving sentiment towards the euro area economy to start the year but this needs to be reflected in hard data in the coming months for policymakers to feel more relief that economic conditions are indeed starting to pick up again.
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