29 Jan 2015
Eurozone economic sentiment starts to improve – ING
FXStreet (Barcelona) - Peter Vanden Houte of ING, reviews the European Commission’s business and consumer survey, noting that the overall sentiment is improving as a result of an increase in retail and consumer confidence, but the falling consumer price expectations suggests that deflationary threat is still present.
Key Quotes
“The European Commission (EC) business and consumer survey rose to 101.2 in January from 100.6 in December 2014, below the consensus expectation for an increase to 101.5. The business climate indicator climbed to 0.16 from 0.10 last month.”
“The improvement in overall sentiment in January was largely attributable to marked increases in consumer and retail confidence. This is probably due to rising purchasing power on the back of the dramatic fall in oil prices.”
“In the export-sensitive industrial sector confidence showed a tiny increase, with the euro depreciation barely compensating for the weakness in export markets .“
“Selling price expectations fell significantly in the services sector and to a lesser extent in construction and industry, while broadly remaining stable in the retail sector. Consumer price expectations dropped strongly. This clearly shows that the deflationary threat is still present and vindicates the recent ECB decisions.”
“The medicine of lower energy prices, low interest rates and a weaker exchange rate seems to start having a modest impact on the Eurozone economy. However, given the weakness of the patient, it’s definitely too soon to hope for a quick recovery.”
Key Quotes
“The European Commission (EC) business and consumer survey rose to 101.2 in January from 100.6 in December 2014, below the consensus expectation for an increase to 101.5. The business climate indicator climbed to 0.16 from 0.10 last month.”
“The improvement in overall sentiment in January was largely attributable to marked increases in consumer and retail confidence. This is probably due to rising purchasing power on the back of the dramatic fall in oil prices.”
“In the export-sensitive industrial sector confidence showed a tiny increase, with the euro depreciation barely compensating for the weakness in export markets .“
“Selling price expectations fell significantly in the services sector and to a lesser extent in construction and industry, while broadly remaining stable in the retail sector. Consumer price expectations dropped strongly. This clearly shows that the deflationary threat is still present and vindicates the recent ECB decisions.”
“The medicine of lower energy prices, low interest rates and a weaker exchange rate seems to start having a modest impact on the Eurozone economy. However, given the weakness of the patient, it’s definitely too soon to hope for a quick recovery.”