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Thumbs up for euro zone as sentiment soars

Wednesday, November 29, 2017 - 01:57

Euro zone economic sentiment rose in November for the sixth consecutive month to its highest level in more than 17 years, data from the European Commission has showed. As David Pollard reports, inflation expectations also grew increasing pressure on the ECB despite political uncertainly in Germany and Spain.

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It's not every day the euro zone gets a thumbs up as big ... As this one being installed outside the Pompidou Centre in Paris - ahead of an exhibition. (SOUNDBITE) (French) BELGIAN TOURIST, RIK DEMEULENAERE, SAYING: "Thumbs up - it means everything is good." And everything does look good in the latest confidence readings. Economic sentiment at a 17 year high after six months of gains... And overall business climate index at a decade high. As the feelgood factor spreads beyond just its main powerhouse, Germany. SOUNDBITE (English) CITY INDEX MARKET ANALYST, KEN ODELUGA, SAYING: "For France, it's very very tempting to take it as a sign of growing optimism on the back of you know a a new presidency ... For Spain, by and large Spain has had an excellent year and actually withstood a couple of shocks as well." One problem for Germany is that things might be a little too good. (SOUNDBITE) (English) THINK MARKETS, CHIEF MARKET ANALYST, NAEEM ASLAM, SAYING: "If you look at the unemployment number in certain cities unemployment is less than 1.2, 1.3 three percent. Companies, factories, businesses they are losing contracts just because they do not have the skills." Even low-to-no inflation, the euro zone's traditional bugbear, appears to have gone away as a problem. Germany's accelerated to 1.8 per cent this month - economists expect 1.6 per cent for the euro zone as a whole. Ever closer to the ECB target rate - though it's likely to be restrained in turning off QE .... Amid ongoing uncertainties on banks - and on over-exuberant financial markets. (SOUNDBITE) (English) ECB VICE-PRESIDENT VITOR CONSTANCIO, SAYING: "Some correction of prices in asset markets would not be enough to derail the economic recovery ... Other more deeper events could." A timely reminder perhaps that in a continent where memories of its debt crisis are still fresh, all that glitters is not always gold ....

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Thumbs up for euro zone as sentiment soars

Wednesday, November 29, 2017 - 01:57