Some Positive Data From Europe Today, Despite Tougher Restrictions
The restrictions have increased again, particularly in Europe which is going through another lock-down. Th economy has weakened again and services h ave fallen in recession for the second time this year. Although, today there was a positive round of economic data coming out of Europe. Industrial production increased in Germany, although that report is for October, before the lock-downs, while the investor confidence improved this month.
German Industrial Production Report from Destatis – 7 December
- October industrial production +3.2% vs +1.6% m/m expected
- September industrial production +1.6%; revised to +2.3%
- Industrial production WDA -3.0% vs -4.6% y/y expected
- Prior -7.3%; revised to -6.7%
A solid boost in terms of German factory output to start Q4 but that was very much expected already, although the beat is most welcome. November may still see more robust conditions but as tighter restrictions are prolonged, that still clouds the outlook until there is more clarity surrounding the virus situation.
Eurozone Investor Confidence Report
- December Sentix investor confidence -2.7 vs -7.8 expected
- November investor confidence -10.0
Vaccine hopes bolsters investor morale and that exemplifies the big picture sentiment in the market. While today may see risk trades and the dollar decline pull back, it is tough to argue against a forward-looking market in the grand scheme of things. Looking at the other details in the report, the expectations component rose from 15.3 in November to 29.3 in December, the highest level since April 2015.
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