- Evelyn Herrmann, European economist at BNP Paribas SA
Euro zone economic sentiment improved for the second consecutive month in November as an increase in industry sentiment offset pessimism among consumers, a tentative sign the currency bloc is escaping outright stagnation. According to the European Commission, economic sentiment in the 18-nation area climbed to 100.8 up from 100.7 a month earlier and 99.9 in September. The Commission forecasts the Euro zone's economy, which produces almost a fifth of global output, to avoid a recession this year. However, it will not reach solid growth until 2016, a year later than the EU executive had initially expected. In Germany, the European powerhouse, jobless rate declined to a record low as businesses and investors believe the Europe's number one economy will continue to grow. The number of unemployed people dropped a seasonally adjusted 14,000 to 2.87 million in November, the Federal Labor Agency said. The adjusted unemployment rate was 6.6%, the lowest level on record. Germany's economy returned to growth in the third quarter and business confidence and investor sentiment both improved in November as the ECB deployed fresh stimulus to support the Euro area's economy. Nevertheless, the Bundesbank says momentum will be lacking until at least the end of the year. Meanwhile, falling prices in Spain, which has been dropping for the fifth month in a row, add to the Euro zone's deflationary pressure. Spanish consumer prices fell 0.4% on year in November.
© Dukascopy Bank SA