Europe’s Economic Sentiment Rises Despite Deflation Threat

Euro zone economic sentiment rose more than expected in December and inflation expectations picked up, data showed on Thursday, easing some pressure on the European Central Bank to loosen monetary strings further.

Sentiment in the euro zone’s southern, peripheral economies improved more than in core Germany and France.

Economic sentiment in the 17 countries sharing the euro in the month strengthened by 1.6 points to 100.0 in the eight straight month of gains, beating economists’ expectations, data from the European Commission showed on Thursday.

Economists polled by Reuters had expected an improvement only to 99.1 points. The more optimistic numbers come as the ECB meets on interest rates, concerned that low consumer inflation risks being stuck in what the bank considers a ‘danger zone’ for tipping into deflation.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza