Europeans more confident about economy

Faith in the 17-nation currency bloc has hit the highest level in two years this month, cementing expectations the recovery is underway. On Friday, September 27, the European Commission said a gauge of business morale soared to 96.9 in September, from August's 95.3, posting the best reading since August 2011 and prolonging a streak of five consecutive months of gains. Analysts, however, expected a slightly weaker figure of just 96.0. Moreover, sentiment among retailers advanced to -7 from -10.6 a month earlier, while managers were also particularly more upbeat about the present business situation. Consumers sentiment also continued the upward trend persisting since December 2012, as a measure of consumer sentiment hit -14.9 supported by more optimistic views on the future general situation. 

Investors have joined analysts' optimisms, amid signs of resurgence in the Eurozone, since it returned to growth in the second quarter after 18 consecutive months of contraction. Hence, the benchmark Stoxx Europe 600 Index inched higher 4% in the last two months, though it is still struggling with the legacy of the debt crisis. Even taking into account weak industrial production, improvement in consumers' and business morale is likely to provide an additional boost to the economy. However, situation in the labour market is still horrifying, as 12.1% of Europeans are unemployed, while the recovery is needed to be firmly established.