27 Jun 2014
Weakening of Eurozone economic sentiment in June is no reason to panic - ING
FXStreet (Łódź) - Martin van Vliet from ING suggests that today's below consensus European Commission business and consumer survey numbers add to concerns over a recovery slowdown in the area.
Key quotes
"The fall in the overall economic sentiment index (ESI), from 102.6 to 102.0 confounded the consensus forecast of a rise to 103.0 and fully reversed the 0.6 point increase in May. However, the index remains well above its long-term average (100) and is still at a level consistent with quarterly gains in GDP of 0.3%/0.4%."
"The decline in overall sentiment in June was led by a drop in the export-sensitive industrial sector. Confidence in the services and retail trade sector actually improved, although the drop in consumer confidence raises questions over the durability of this further improvement."
"The country breakdown, meanwhile, revealed that the decline in sentiment was fairly broad-based, with Spain, the Netherlands and especially Greece notable exceptions (the ESI in Greece rose above its long term average for the first time since August 2008)."
"All in all, the weakening of Eurozone economic sentiment in June is no reason to panic. Business and consumer confidence remain at levels consistent with ongoing economic recovery."
"But it further vindicates the ECB’s recent decision to implement further policy easing. The Eurozone economy simply needs stimulus to sustain this recovery and avert a Japan deflation scenario."
Key quotes
"The fall in the overall economic sentiment index (ESI), from 102.6 to 102.0 confounded the consensus forecast of a rise to 103.0 and fully reversed the 0.6 point increase in May. However, the index remains well above its long-term average (100) and is still at a level consistent with quarterly gains in GDP of 0.3%/0.4%."
"The decline in overall sentiment in June was led by a drop in the export-sensitive industrial sector. Confidence in the services and retail trade sector actually improved, although the drop in consumer confidence raises questions over the durability of this further improvement."
"The country breakdown, meanwhile, revealed that the decline in sentiment was fairly broad-based, with Spain, the Netherlands and especially Greece notable exceptions (the ESI in Greece rose above its long term average for the first time since August 2008)."
"All in all, the weakening of Eurozone economic sentiment in June is no reason to panic. Business and consumer confidence remain at levels consistent with ongoing economic recovery."
"But it further vindicates the ECB’s recent decision to implement further policy easing. The Eurozone economy simply needs stimulus to sustain this recovery and avert a Japan deflation scenario."