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Euro zone data keeps investors upbeat

Wednesday, January 04, 2017 - 01:41

The strongest upswing in euro zone business growth in more than five years takes economists by surprise - and inflation is on the front burner again. As David Pollard reports, that's prompting questions from some quarters over whether the ECB should row back on its QE stimulus programme.

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It's late to the party - the Tokyo stock market waiting until Wednesday to ring in the New Year opening. But there's still plenty to celebrate ... Not least of all the euro zone, where the latest PMI readings show the fastest pickup in over five years. (SOUNDBITE) (English) FIDELITY INTERNATIONAL, INVESTMENT DIRECTOR, TOM STEVENSON, SAYING: "The good news is that the improvements are pretty much across the board. We're seeing slightly better improvements in Germany at the core than in places like Italy and obviously Greece is still having problems, but generally the PMIs are pretty strong across the board." Euro zone inflation too is stronger. Headline CPI in Germany vigorous enough to prompt the influential IFO institute to say that - if euro zone inflation followed suit - the ECB should end QE. In the event, the headline euro zone rate came in lower than Germany's - but was still a welcome sign for the ECB. 60 billion euros worth of asset purchases a month may finally be yielding results, after all ... (SOUNDBITE) (English) FIDELITY INTERNATIONAL, INVESTMENT DIRECTOR, TOM STEVENSON, SAYING: "The ECB will ease back on QE in time but they've extended the QE programme until the end of the year and I think that will remain in place. I think the ECB remains out of the picture really until the elections in France and Germany are out of the way during the rest of this year." There are other telltales of better growth - and in Japan too. Even if the best reading on its own manufacturing in a year wasn't quite enough to get everyone into the party mood ....

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Euro zone data keeps investors upbeat

Wednesday, January 04, 2017 - 01:41