Economic Recovery Optimism Rises in Europe

Optimism in the euro zone about its economic prospects continued to improve in January with a jump in morale in the bloc’s two largest economies, Germany and France.

Economic sentiment in the 18 countries using the euro strengthened by 0.5 points to 100.9 in the ninth straight month of gains, data from the European Commission showed on Thursday.

Analysts polled by Reuters had expected an improvement to 101.0 in January.

Consumer confidence improved sharply by 1.8 to swing above its long term-average for the first time since July 2011 thanks to improving job expectations and a brighter outlook.

While services and retail trade morale improved in January, however, construction sector sentiment fell sharply by 3.7 in part because of lower orders.

Europe’s top economy, Germany, saw sentiment improve by 0.7 to 106.7 points in January, while sentiment in France rose by 1.1 to 97.1.

The business climate in the 9.5 trillion euro economy was virtually unchanged at 0.19 in January, compared with 0.2 in December, data from the Commission said.

The euro zone’s recovery is expected to gather speed this year, despite record high unemployment.

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