"Next year, compared with the last two years, we will have rather strong growth but not a boom. We still see some problems in the euro area."
- Ralph Solveen, head of economic research at Commerzbank AG
Following better-than-expected German ZEW economic sentiment, IFO Institute said the business climate in the Eurozone's number one economy advanced for a second straight month in December, supporting the case of a quickening growth. A measure of business climate, which is based on a survey of 7,000 German executives, ticked up to 109.5 this month, accelerating from 109.3 a month earlier. The figure came fully in line with analysts' forecasts. The index of current conditions, however, fell to 111.6 from 112.2 in November, and well below the forecast of 112.5 points. Solid improvement in sentiment as well as growing manufacturing production are all pointing at the ongoing recovery in Germany. Meanwhile, the world's third-biggest maker of luxury cars– Daimler AG's Mercedes-Benz, pledged to increase working hours in order to meet the growing demand. Despite welcoming data, the single currency inched higher just 0.1% reaching 1.3769 versus the U.S. Dollar. Subdued market volatility can be explained by low trading volumes in December, as well as the fact the real mover in the Forex market will be the FOMC meeting.
While there is a lack of volatility in the markets, the latest data is suggesting the bloc's economy is gaining momentum, and easing concerns the ECB will be forced to act to achieve a long-term sustainable growth.
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