“The bias for risk-seeking is still in vogue.” This has nothing to do with the Euro, but rather is a roundabout way of speaking about the Dollar carry trade, which is responsible for an exodus of capital from the US, some of have which has no doubt found its way into Europe. In some ways, then, it’s almost pointless to scrutinize EU economic indicators too closely.That being said, there are a few meaningful observations that can be made. The first is that the EU economy is tentatively in recovery mode. Some of the most such as the German IFO index, capacity utilization, and Economic Sentiment Indicator, have all ticked up in the last month, while the unemployment rate is holding steady. For better or worse, this improvement can attributed entirely to export growth, due to the recovery in world trade. which means that the Euro Zone has officially exited the recession.The second observation is that many expect this exit to be short-lived. Due to the relative rigidity of the EU economy, specifically regarding the labor market, it may take additional time to get back on really solid footing. Thus, the “thinks that euro-area unemployment will continue to rise next year, reaching 10.9% in 2011. That will dampen consumer spending. Another worry is investment, which the commission thinks will fall by 17.9% this year. Businesses are unlikely to waste scarce cash on new equipment and offices when they have spare capacity. Firms confident enough to splash out may find it hard to secure the necessary financing from fragile and risk-averse banks.” The Commission also expects public finances to continue to deteriorate, perhaps bottoming at some point next year. There is even an outside concern that one of the fringe members of the EU could , requiring a bailout in the same vein as the lifeline grudgingly being thrown to Dubai by the UAE.Finally, there is the European Central Bank. Much like the Fed – and every other Central Bank in the industrialized world, except for Australia – the ECB is nowhere near ready to hike rates. “The overall economic context doesn’t suggest that they would want to tighten anytime soon. There is a feeling that, yes, things have improved, but that nonetheless, the outlook is still quite fragile,” summarized one economist. Sure, the ECB is winding down its liquidity programs, but so is the Fed. Based on long-term bond yields, investors believe that US rates could even eclipse EU rates at some point in the future.In short, there isn’t really much to be optimistic about, when it comes to the Euro. The nascent recovery is hardly remarkable, and probably not even sustainable. While the Euro might continue to perform the Euro in the short-term for technical reasons, I would expect this edge to evaporate in the medium-term.summarized the Euro’s ascent by noting, “The bias for risk-seeking is still in vogue.” This has nothing to do with the Euro, but rather is a roundabout way of speaking about the Dollar carry trade, which is responsible for an exodus of capital from the US, some of have which has no doubt found its way into Europe. In some ways, then, it’s almost pointless to scrutinize EU economic indicators too closely.That being said, there are a few meaningful observations that can be made. The first is that the EU economy is tentatively in recovery mode. Some of the most such as the German IFO index, capacity utilization, and Economic Sentiment Indicator, have all ticked up in the last month, while the unemployment rate is holding steady. For better or worse, this improvement can attributed entirely to export growth, due to the recovery in world trade. which means that the Euro Zone has officially exited the recession.The second observation is that many expect this exit to be short-lived. Due to the relative rigidity of the EU economy, specifically regarding the labor market, it may take additional time to get back on really solid footing. Thus, the “thinks that euro-area unemployment will continue to rise next year, reaching 10.9% in 2011. That will dampen consumer spending. Another worry is investment, which the commission thinks will fall by 17.9% this year. Businesses are unlikely to waste scarce cash on new equipment and offices when they have spare capacity. Firms confident enough to splash out may find it hard to secure the necessary financing from fragile and risk-averse banks.” The Commission also expects public finances to continue to deteriorate, perhaps bottoming at some point next year. There is even an outside concern that one of the fringe members of the EU could , requiring a bailout in the same vein as the lifeline grudgingly being thrown to Dubai by the UAE.Finally, there is the European Central Bank. Much like the Fed – and every other Central Bank in the industrialized world, except for Australia – the ECB is nowhere near ready to hike rates. “The overall economic context doesn’t suggest that they would want to tighten anytime soon. There is a feeling that, yes, things have improved, but that nonetheless, the outlook is still quite fragile,” summarized one economist. Sure, the ECB is winding down its liquidity programs, but so is the Fed. Based on long-term bond yields, investors believe that US rates could even eclipse EU rates at some point in the future.In short, there isn’t really much to be optimistic about, when it comes to the Euro. The nascent recovery is hardly remarkable, and probably not even sustainable. While the Euro might continue to perform the Euro in the short-term for technical reasons, I would expect this edge to evaporate in tsummarized the Euro’s ascent by noting, “The bias for risk-seeking is still in vogue.” This has nothing to do with the Euro, but rather is a roundabout way of speaking about the Dollar carry trade, which is responsible for an exodus of capital from the US, some of have which has no doubt found its way into Europe. In some ways, then, it’s almost pointless to scrutinize EU economic indicators too closely.That being said, there are a few meaningful observations that can be made. The first is that the EU economy is tentatively in recovery mode. Some of the most such as the German IFO index, capacity utilization, and Economic Sentiment Indicator, have all ticked up in the last month, while the unemployment rate is holding steady. For better or worse, this improvement can attributed entirely to export growth, due to the recovery in world trade, which means that the Euro Zone has officially exited the recession.The second observation is that many expect this exit to be short-lived. Due to the relative rigidity of the EU economy, specifically regarding the labor market, it may take additional time to get back on really solid footing. Thus, the “thinks that euro-area unemployment will continue to rise next year, reaching 10.9% in 2011. That will dampen consumer spending. Another worry is investment, which the commission thinks will fall by 17.9% this year. Businesses are unlikely to waste scarce cash on new equipment and offices when they have spare capacity. Firms confident enough to splash out may find it hard to secure the necessary financing from fragile and risk-averse banks.” The Commission also expects public finances to continue to deteriorate, perhaps bottoming at some point next year. There is even an outside concern that one of the fringe members of the EU could , requiring a bailout in the same vein as the lifeline grudgingly being thrown to Dubai by the UAE.Finally, there is the European Central Bank. Much like the Fed – and every other Central Bank in the industrialized world, except for Australia – the ECB is nowhere near ready to hike rates. “The overall economic context doesn’t suggest that they would want to tighten anytime soon. There is a feeling that, yes, things have improved, but that nonetheless, the outlook is still quite fragile,” summarized one economist. Sure, the ECB is winding down its liquidity programs, but so is the Fed. Based on long-term bond yields, investors believe that US rates could even eclipse EU rates at some point in the future.In short, there isn’t really much to be optimistic about, when it comes to the Euro. The nascent recovery is hardly remarkable, and probably not even sustainable. While the Euro might continue summarized the Euro’s ascent by noting, “The bias for risk-seeking is still in vogue.” This has nothing to do with the Euro, but rather is a roundabout way of speaking about the Dollar carry trade, which is responsible for an exodus of capital from the US, some of have which has no doubt found its way into Europe. In some ways, then, it’s almost pointless to scrutinize EU economic indicators too closely.That being said, there are a few meaningful observations that can be made. The first is that the EU economy is tentatively in recovery mode. Some of the most such as the German IFO index, capacity utilization, and Economic Sentiment Indicator, have all ticked up in the last month, while the unemployment rate is holding steady. For better or worse, this improvement can attributed entirely to export growth, due to the recovery in world trade. , which means that the Euro Zone has officially exited the recession.The second observation is that many expect this exit to be short-lived. Due to the relative rigidity of the EU economy, specifically regarding the labor market, it may take additional time to get back on really solid footing. Thus, the “thinks that euro-area unemployment will continue to rise next year, reaching 10.9% in 2011. That will dampen consumer spending. Another worry is investment, which the commission thinks will fall by 17.9% this year. Businesses are unlikely to waste scarce cash on new equipment and offices when they have spare capacity. Firms confident enough to splash out may find it hard to secure the necessary financing from fragile and risk-averse banks.” The Commission also expects public finances to continue to deteriorate, perhaps bottoming at some point next year. There is even an outside concern that one of the fringe members of the EU could , requiring a bailout in the same vein as the lifeline grudgingly being thrown to Dubai by the UAE.Finally, there is the European Central Bank. Much like the Fed – and every other Central Bank in the industrialized world, except for Australia – the ECB is nowhere near ready to hike rates. “The overall economic context doesn’t suggest that they would want to tighten anytime soon. There is a feeling that, yes, things have improved, but that nonetheless, the outlook is still quite fragile,” summarized one economist. Sure, the ECB is winding down its liquidity programs, but so is the Fed. Based on long-term bond yields, investors believe that US rates could even eclipse EU rates at some point in the future.In short, there isn’t really much to be optimistic about, when it comes to the Euro. The nascent recovery is hardly remarkable, and probably not even sustainable. While the Euro might continue to perform the Euro in the short-term for technical reasons, I would expect this edge to evaporate in the medium-term.to perform the Eusummarized the Euro’s ascent by noting, “The bias for risk-seeking is still in vogue.” This has nothing to do with the Euro, but rather is a roundabout way of speaking about the Dollar carry trade, which is responsible for an exodus of capital from the US, some of have which has no doubt found its way into Europe. In some ways, then, it’s almost pointless to scrutinize EU economic indicators too closely.That being said, there are a few meaningful observations that can be made. The first is that the EU economy is tentatively in recovery mode. Some of the most such as the German IFO index, capacity utilization, and Economic Sentiment Indicator, have all ticked up in the last month, while the unemployment rate is holding steady. For better or worse, this improvement can attributed entirely to export growth, due to the recovery in world trade. , which means that the Euro Zone has officially exited the recession.The second observation is that many expect this exit to be short-lived. Due to the relative rigidity of the EU economy, specifically regarding the labor market, it may take additional time to get back on really solid footing. Thus, the “thinks that euro-area unemployment will continue to rise next year, reaching 10.9% in 2011. That will dampen consumer spending. Another worry is investment, which the commission thinks will fall by 17.9% this year. Businesses are unlikely to waste scarce cash on new equipment and offices when they have spare capacity. Firms confident enough to splash out may find it hard to secure the necessary financing from fragile and risk-averse banks.” The Commission also expects public finances to continue to deteriorate, perhaps bottoming at some point next year. There is even an outside concern that one of the fringe members of the EU could , requiring a bailout in the same vein as the lifeline grudgingly being thrown to Dubai by the UAE.Finally, there is the European Central Bank. Much like the Fed – and every other Central Bank in the industrialized world, except for Australia – the ECB is nowhere near ready to hike rates. “The overall economic context doesn’t suggest that they would want to tighten anytime soon. There is a feeling that, yes, things have improved, but that nonetheless, the outlook is still quite fragile,” summarized one economist. Sure, the ECB is winding down its liquidity programs, but so is the Fed. Based on long-term bond yields, investors believe that US rates could even eclipse EU rates at some point in the future.In short, there isn’t really much to be optimistic about, when it comes to the Euro. The nascent recovery is hardly remarkable, and probably not even sustainable. While the Euro might continue to perform the Euro in the short-term for technical reasons, I would expect this edge to evaporate in the medium-term.summarized the Euro’s ascent by noting, “The bias for risk-seeking is still in vogue.” This has nothing to do with the Euro, but rather is a roundabout way of speaking about the Dollar carry trade, which is responsible for an exodus of capital from the US, some of have which has no doubt found its way into Europe. In some ways, then, it’s almost pointless to scrutinize EU economic indicators too closely.That being said, there are a few meaningful observations that can be made. The first is that the EU economy is tentatively in recovery mode. Some of the most such as the German IFO index, capacity utilization, and Economic Sentiment Indicator, have all ticked up in the last month, while the unemployment rate is holding steady. For better or worse, this improvement can attributed entirely to export growth, due to the recovery in world trade. , which means that the Euro Zone has officially exited the recession.
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