Eurozone Industrial Output Bounces Back sharply; German investor confidence rises 5.7 points in August - General

thenews 2013.08.13 11:05 #161

Eurozone industrial output bounces back sharply

A sharp rebound in eurozone industrial output for June is another pointer that the single currency bloc is finally edging out of a record 18-month recession, official data showed on Tuesday.

Industrial production in the 17-nation eurozone jumped 0.7 percent from the level in May when it fell 0.2 percent, bolstering hopes that overall economic growth figures due on Wednesday will show a long-awaited switch out of recession.

Compared with industrial output in June 2012, the eurozone gained 0.3 percent, the Eurostat statistics agency said.

The figures are the latest to suggest the eurozone is turning the corner, with retail sales, business and consumer confidence and now industrial output all encouraging after months in the doldrums.

The report coincided with positive news from Germany, Europe's powerhouse economy, where the closely watched investor confidence index calculated by the ZEW economic institute rose by 5.7 points to 42.0 points in August.

That was the best reading since March and also beat analyst forecasts for an increase to about 40 points.

"First signs of an end to the recession in important eurozone countries may have contributed to the indicator's rise. Furthermore, the economic optimism is supported by robust domestic demand in Germany," ZEW said.

For the survey, ZEW questions analysts and institutional investors about their assessment of the economic situation in Germany, as well as their expectations for the coming months.

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thenews 2013.08.13 16:03 #162

German Regulators to Order Deutsche Bank to Improve Controls

German banking authorities are likely to order Deutsche Bank AG DBK.XE -0.34% to improve its internal controls, as regulators wrap up an investigation into alleged manipulation of Libor by traders at the bank.

The German regulator, known as BaFin, is expected to submit a finished report to the bank later this week, addressing failings and ordering improvements as it starts to conclude its investigation into alleged rigging of interest rates, according to a person close to the investigation.

BaFin will continue for weeks or months to examine other aspects of alleged rate manipulation by Deutsche Bank employees, including that of the London interbank offered rate, the person said.

The conclusion of the German probe is expected to clear the way for Deutsche Bank eventually to settle Libor-rigging allegations with U.S. and U.K. regulators, according to people familiar with the investigations. Any settlement with those authorities is unlikely before the end of 2013 at the earliest, the people said.

Regulators have settled rate-rigging allegations with Barclays BARC.LN -0.47% PLC, Royal Bank of Scotland Group RBS.LN +1.06% PLC and UBS AG, collecting about $2.5 billion in penalties. All three banks admitted that employees sought to rig rates. As previously reported, more than a dozen financial firms still are under scrutiny as part of the world-wide probe, including Deutsche Bank.

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thenews 2013.08.14 05:51 #163

Germany Joins France With Faster-Than-Forecast Expansion

Europe’s two largest economies expanded more than economists predicted in the second quarter, helping to pull the euro area out of its longest-ever recession.

German gross domestic product rose 0.7 percent from the first quarter, when it stagnated, the Federal Statistics Office in Wiesbaden said today. The French economy grew 0.5 percent, posting its best quarterly expansion since President Francois Hollande came to power in May 2012. Economists predicted growth of 0.6 percent and 0.2 percent, respectively, according to Bloomberg News surveys. GDP results for the 17-nation euro-area will be published at 11:00 a.m. in Luxembourg.

The euro rose after the reports and traded at $1.3271 at 8:40 a.m. in Frankfurt. Futures on the Euro Stoxx 50 index increased 0.3 percent.

Faster growth in the region’s two largest economy probably coaxed the currency bloc out of a six-quarter slump, supporting the European Central Bank’s prediction of a gradual recovery in the second half. At the same time, unemployment in the euro area remains at a record high of 12.1 percent and the Bundesbank expects a slowdown in Germany later this year.

“We’ve seen many positive surprises in the second quarter and data this morning confirm that the euro zone is out of recession,” said Andreas Scheuerle, an economist at Dekabank in Frankfurt. “There’s no guarantee that there won’t be setbacks in the future. But the ECB’s baseline scenario is materializing and that means rate cuts are off the table for now.”

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thenews 2013.08.14 07:42 #164

Euro zone exits longest recession in over 40 years

The euro zone posted 0.3 percent growth in the second quarter of 2013 from the first, beating expectations for 0.2 percent growth and signaling the end of the longest recession in continental Europe in over 40 years.

Although the news was cheered, unemployment remains stubbornly high in the euro zone, at 12.1 percent in June and analysts warned that Europe's crisis had not disappeared yet.

"[Europe is] beyond the worst - I'm not sure we've turned the corner yet but it does feel better and at least it's a positive number after 18 months of negative, negative, negative, "Daragh Maher, senior FX strategist at HSBC, said.

Carsten Brzeski, senior economist at ING, agreed the euro zone still had a long way to go before positive growth numbers could honestly be called recovery. "But relief should stand above skepticism, at least for one day," he said.

Earlier, Germany and France posted forecast-beating growth in the second quarter. Germany's economy grew by 0.7 percent in the second quarter from the first, as domestic public and private consumption picked up. Meanwhile, France leaped out of a recession, posting 0.5 percent growth in the second quarter, way above expectations of 0.2 percent growth.

Forex News (from InstaForex) German, French economies subside German economy to return

thenews 2013.08.14 12:18 #165

Spain New Industrial Orders Decline In June

Spain's new industrial orders decreased in June, data released by the statistical office INE showed on Wednesday.

New orders dropped an unadjusted 7.8 percent year-on-year in June, following a 1.3 percent fall in May. Orders from the domestic market dropped 8.5 percent and that for the foreign market fell 13.3 percent.

On a seasonal and calendar-adjusted basis, new orders fell 4.3 percent annually in June compared to a 1.1 percent drop in the previous month.

Month-on-month, new orders declined 0.7 percent versus 0.3 percent rise in May. It was first drop in three months.

The INE also reported that industrial turnover decreased 4.0 percent annually in June, following a 2.2 percent drop in the previous month. Industrial sales edged up a seasonal and calendar-adjusted 0.1 percent against a 2.0 percent fall in the previous month.

On a monthly basis, sales grew a seasonally adjusted 0.4 percent in June, after a 0.8 percent rise in the previous month.

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thenews 2013.08.14 19:09 #166

5 Economic Lessons Europe Can Learn From Greece

By any reasonable measure, the IMF-European Union (EU) bailout package for Greece has been an unmitigated disaster.

As the IMF itself now acknowledges in a commendably frank report, over the past four years Greece’s economy has contracted by 25 percent and its unemployment rate has risen to a staggering 27-½ percent of the labor force. Yet despite this economic collapse, no meaningful economic recovery is in prospect anytime soon as Greece’s teetering coalition government is still obliged to pursue budget austerity and as Greek banks continue to restrict credit to both households and enterprises.

Greece’s economic tragedy, which is by now on the same relative scale as was the Great Depression for the United States, is bound to exact the heaviest of long-run social and political costs on the country. Considering that a number of other European countries like Cyprus, Ireland, and Portugal are all now also under IMF -EU tutelage, the Greek tragedy would be all the more tragic if these countries did not pay close heed to the following five lessons from Greece’s experience in the hope that they can avoid anything similar to Greece’s tragic fate.

Budget austerity in a currency straitjacket does not work

If there is a single lesson that should have been learnt from Greece’s failed economic program it is that severe budget austerity within a euro straitjacket simply does not work. For without the ability to devalue its currency so as to boost export growth or the tourist sector as an offset to the negative impact of fiscal tightening on domestic demand, the country’s economy runs the real risk of entering a debilitating deflationary spiral. This is particularly the case in the context of a weak banking system that is confronted with increased amounts of non-performing loans and that restricts credit to households and companies.

The big fat Greek [Branch closed!] EURUSD - Market Views For 2016

thenews 2013.08.15 13:25 #167

Eurozone On Course For Further Modest Growth In Q3: IHS Global Insight

Eurozone's economy is on track for further modest expansion in the third quarter, though growth will remain constrained by a number of factors, IHS Global Insight's Chief European and UK Economist Howard Archer said.

Eurozone economy may keep expanding, though growth will be limited, he said. Reduced fiscal tightening in many countries, extended low inflation, an eventual stabilization of labor markets and gradually strengthening global growth should help Eurozone activity to gradually improve during 2014, Archer noted.

Businesses should become gradually more prepared to invest in a developing more favorable environment, he added.

According to the economist, the upside for growth will remain limited for some considerable time to come by serious headwinds, notably including still restrictive fiscal policies, ongoing tight credit conditions amid still significant banking sector problems, very high unemployment and muted consumer purchasing power.

Given this environment, businesses are likely to only gradually raise their investment plans, Archer pointed out.

Official data released Wednesday showed that the 17-nation economy exited recession with the gross domestic product expanding 0.3 percent quarter-on-quarter in the second quarter, reversing a 0.3 percent contraction in the first quarter.

According to Archer, the Eurozone's better-than-expected return to growth in the second quarter reduces the case for the European Central Bank to take interest rates lower. "Even so, we would not rule out the ECB eventually taking its key policy rate down from 0.50 percent to 0.25 percent," he said.

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thenews 2013.08.15 14:20 #168

EUR/USD gains as mixed U.S. data clouds timing of Fed tapering

The euro traded higher against the dollar on Thursday as investors digested mixed economic data and concluded that the Federal Reserve will likely keep dollar-weakening stimulus programs in place possibly through the end of this year.

In U.S. trading on Thursday, EUR/USD was up 0.06% at 1.3264, up from a session low of 1.3205 and off from a high of 1.3310.

The pair was likely to find support at 1.3190, the low from Aug. 2, and resistance at 1.3399, last Thursday's high.

The Department of Labor reported earlier that weekly jobless claims in the U.S. fell to their lowest level since January 2008 last week, dropping by 15,000 to 320,000.

The Department of Labor also revealed that the U.S. consumer price index rose 0.2% in July from June and 2.0% from July of last year, in line with analysts' forecasts.

The core consumer price index, which is stripped of volatile food and energy costs, also rose 0.2% in July from June and 1.7% on year, also matching consensus forecasts.

The data reinforced views held by many the economic recovery may be strong enough to prompt the U.S. Federal Reserve to announce plans to taper its monthly USD85 billion bond-buying program this year, though soft output data dampened recent expectations for tapering to begin at the Fed's September meeting.

U.S. industrial production came in flat in July, according to the Federal Reserve, missing expectations for a 0.3% increase

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thenews 2013.08.15 20:31 #169