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Euro zone trade surplus widens in July on exports revival
The euro zone's trade surplus widened in July thanks to a revival in exports, another sign that sales to the rest of the world are proving to be central to the bloc's recovery.
The seasonally unadjusted surplus of 17 countries sharing the euro widened to 18.2 billion euros ($24.30 billion) from 13.9 billion euro surplus in July last year, the European Union's statistics office Eurostat said on Tuesday.
Exports rose by 3 percent, year on year, following a 3 percent drop in June compared to the same month a year ago. Imports were flat in July after a 6 percent decrease in June, suggesting that European household demand may be picking up.
The unadjusted cumulative surplus for the first seven months of the year stood at 90.8 billion euros, compared with 35.1 billion euros in the same period of last year.
A bounce in exports helped to pull the bloc out of recession in the second quarter, lifting growth from Germany to Portugal.
The bloc's 9.5 trillion euro economy saw exports to non-euro zone Britain, as well as Russia and Turkey, rising in July, although both exports and imports to and from the United States and China declined.
Exports from Germany also surprised with a fall in July and underscored that domestic spending is key for growth in Europe's largest economy this year, highlighting the risks of a bumpy recovery ahead.
The European Commission says the recovery in the euro zone is expected to gain a more solid footing next year, but economists do not see healthy growth returning to Europe before 2015.
The European Central Bank, which is expected to keep interest rates at record lows for an extended period of time, trimmed its 2014 growth forecast for the euro zone by 0.1 percentage points to a mid-point of 1 percent in September.
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EU says Greece making progress, must stick to bailout
As Greece was hit Tuesday by yet more public sector strikes against government austerity, the EU insisted the unpopular policy is showing results and must be pursued to the end.
European Commission President Jose Manuel Barroso said that after huge sacrifices, there is "light at the end of the tunnel," with twice-bailed out Greece set to return to growth next year.
"This is no time to take our hands off the wheel, full implementation is essential," Barroso said alongside visiting Greek Prime Minister Antonis Samaras.
Greek doctors joined the latest wave of strikes Tuesday, with thousands of public sector workers protesting against government plans for job cuts and redeployments.
Teachers from schools and universities, civil servants and lawyers are also on strike in protest at reforms Samaras has pushed through as part of the country's bailout programme.
All of Greece's other public sector unions will embark on a two-day strike Wednesday and Thursday.
Overall, Greece has pledged to axe 4,000 state jobs and redeploy 25,000 public sector workers by the end of the year, in return for its much-needed rescue loans.
Samaras said that after six years in a deep and damaging recession, Greece was finally turning the corner, with public finances set to show a primary surplus if debt and interest payments are excluded.
"Today there is no more talk about the infamous 'Grexit,'" Samaras said, referring to the possibility the country would leave the eurozone as it failed to meet its bailout targets.
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Swiss Economic Confidence Rises To Five-Month High
Switzerland's economic confidence increased notably in September to the highest level in five months, data from a combined survey by the Centre for European Economic Research and Credit Suisse showed Wednesday.
The ZEW-CS Indicator of economic expectations advanced to 16.3 in September from 7.2 in August. The indicator, which reflects expectations of surveyed financial market experts regarding economic development in Switzerland on a six-month time horizon, has now reached the highest level since April 2013.
In September, one fourth of the surveyed experts said they expect Switzerland's economic development to improve over a six-month time horizon. Nearly two thirds of the participants foresee a stable economic development.
At the same time, the indicator of experts' views of the current economic situation improved notably in September, by 6.3 points from the previous month to 37.2 points.
Experts' views of the current economic situation in the euro area turned more optimistic in September, with the relevant indicator rising by 3.9 points to 45.3 points a month earlier.
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European Economics Preview: SNB Rate Decision Due
The outcome of Swiss National Bank's rate-setting meeting and retail sales figures from the U.K. are due on Thursday, headlining a light day for the European economic news.
At 1.45 am ET, the State Secretariat for Economic Affairs is slated to release Switzerland's economic forecast. Thereafter, Swiss trade figures are due at 2.00 am ET.
At 3.00 am ET, Hungary's average gross wages are due for July. Wages were up 3.7 percent in June.
Switzerland's central bank is set to announce its rate decision at 3.30 am ET. The bank is widely expected to leave its three-month Libor unchanged at 0.0-0.25 percent and the currency ceiling at CHF 1.2 per euro.
In the meantime, Statistics Netherlands is scheduled to issue consumer confidence and unemployment figures.
At 4.00 am ET, Norges Bank is slated to announce its rate decision. Economists expect the central bank to maintain its key rate at 1.50 percent.
At 4.30 am ET, the Office for National Statistics is scheduled to release U.K. retail sales data. Including auto fuel, retail sales are forecast to grow 0.4 percent month-on-month in August.
The U.K. Industrial Trends survey data is due from the Confederation of British Industry at 6.00 am ET. The industrial order balance is seen at 2 in September, up from 0 a month ago.
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Euro hits 3-1/2 year high versus yen
The euro rose to a 3-1/2 year high against the yen on Thursday, as the safe-haven Japanese currency came under fresh downward pressure as riskier assets and currencies rallied.
Stocks, commodities and higher-yielding currencies all rose after the Federal Reserve maintained its $85 billion monthly asset-buying programme, confounding expectations of a reduction by roughly $10 billion.
The euro rose to 133.985 yen on trading platform EBS, its highest level since early January 2010, and up 1.15 percent on the day.
The dollar was also up 1 percent against the yen at 98.85 yen, recovering from Wednesday's three-week low of 97.76 yen.
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Belgian Consumer Sentiment Improves For Sixth Month
Belgium's consumer confidence improved for the sixth successive month in September, and reached the highest level in two years, data released by the National Bank of Belgium showed Thursday.
The consumer confidence index moved up to -7 in September from -12 in August and -16 in July. The index rose for the sixth month in a row, and is currently in line with its long-term average for the period 1990-2013.
Among components, households' views of the country's economic situation turned more positive in September, with the relevant sub-indicator rising to 9 from 1 a month earlier. The measure of households' perception of their own financial situation advanced to 1 from -4.
Similarly, consumers were more upbeat in September about their capacity to save. The indicator rose to 3 from -7 in August.
Meanwhile, the indicator of confidence in the employment situation moved up to 40 from 39, signaling a less optimistic view of unemployment in the next twelve months
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Greek Industrial Orders Recover In July
New orders in the Greek industrial sector increased in July, after falling in the previous two months, data released by the Hellenic Statistical Authority showed Thursday.
New business received by Greek firms rose 0.8 percent on an annual basis, reversing the 9.3 percent decline seen in June. In May, orders fell by 13.8 percent.
The rebound was supported entirely by a 3.9 percent rise in demand in the overseas market, as orders in the domestic market decreased by 3.2 percent.
During the twelve months ended July, new orders fell 5.4 percent from the corresponding period of 2012, data showed.
Separately, the agency said Greece's industrial turnover advanced 3.6 percent year-on-year in July, after falling 4.8 percent a month earlier.
Driving the overall improvement, exports sales climbed 16.8 percent annually, while turnover in the domestic market dropped 4.2 percent.
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Italy's Industrial New Orders Continue To Fall
New orders in the Italian industrial sector contracted for the ninth successive month in July, but at a slower rate than in the previous month, a report released by statistical office Istat showed Friday.
New business received by Italian firms, on an unadjusted basis, decreased 2.2 percent on an annual basis in July, slower than the 4.2 percent fall seen a month earlier. Demand has decreased every month since October 2012.
With a 21.1 percent year-on-year decrease, manufacturers of transport equipment recorded the biggest fall in demand. Meanwhile, orders of textiles, clothing, leather and accessories increased 10.8 percent annually, marking the biggest increase.
New orders in the domestic market declined 5.4 percent, which was partially offset by a 1.8 percent rise in demand in the export market.
Month-on-month, industrial orders edged down a seasonally adjusted 0.7 percent in July, after falling 2.5 percent in June.
Istat further noted that the total turnover in the industry fell 3.6 percent annually in July. This followed a 1 percent decline in June. Sequentially, turnover dropped a seasonally adjusted 0.8 percent, reversing the previous month's 0.6 percent gain.
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EUR/USD steady as focus on German vote, U.S. debt ceiling
The euro was little changed against the U.S. dollar on Friday, as investors remained cautious amid renewed concerns over U.S. debt troubles and following comments by St. Louis Federal Reserve Chairman James Bullard.
EUR/USD hit 1.3507 during U.S. morning trade, the session low; the pair subsequently consolidated at 1.3526, easing 0.03%.
The pair was likely to find support at 1.3338, the low of September 18 and resistance at 1.3568, Thursday's high and a seven-month high.
Market were jittery as U.S. Republicans and Democrats must quickly decide on how to continue funding the government and whether to increase the government's borrowing authority by raising the debt ceiling.
If President Barack Obama's administration and Republicans do not come to an agreement to raise the nation's borrowing cap before October, the U.S. Treasury may be able to avoid exceeding the USD16.7 trillion debt limit, which could send the country into default.
Separately, the greenback found some support after St. Louis Fed President James Bullard said on Friday that the U.S. central bank could taper its USD85-billion-a-month bond-buying program during its October meeting.
The comments came after the Fed on Wednesday held back from reducing the USD85 billion pace of its monthly asset purchases.
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Moody's changes outlook on Ireland's Ba1 rating to stable from negative
Moody's Investors Service has today changed the outlook on the Ba1 government bond rating of the Government of Ireland to stable from negative. Concurrently, Moody's has affirmed Ireland's Ba1 and Not-Prime ratings.
The key drivers of the outlook change are the following:
1.) The Irish government's progress in restoring solvency to its public finances, as reflected in the ongoing fiscal consolidation and Moody's expectation that general government debt will level off, relative to GDP.
2.) Ireland's diminished susceptibility to renewed loss of access to financial markets given its progress with reforms and the improvement of its liquidity position as the end of its multilateral support programme approaches.
In a related rating action, Moody's has today also changed the rating outlook to stable from negative for the National Asset Management Agency (NAMA), which is fully and unconditionally guaranteed by the Irish government, and affirmed its Ba1/Not-Prime ratings.
RATIONALE FOR OUTLOOK CHANGE
--- PROGRESS IN RESTORING SOLVENCY TO PUBLIC FINANCES
The first driver behind Moody's change in Ireland's rating outlook is the progress being achieved in restoring the government's financial solvency, as reflected by the resumption of growth, albeit modest at present, and ongoing fiscal consolidation. The rating agency expects the government to re-establish debt-stabilising primary surpluses in 2014 and for those surpluses to expand subsequently, resulting in declines in the government's headline debt-to-GDP ratios as well as improving the affordability of its debt.
Although Moody's believes that Ireland's economic growth is unlikely to return to its pre-crisis pace, the rating agency notes that future growth is probably more sustainable in light of the correction in the country's macroeconomic imbalances, such as the shift from a large deficit to a surplus in the current account position. Positive growth is indispensable for the debt dynamics to turn in a favourable direction. As such, Moody's expects that the resumption of growth among Ireland's major trading partners, particularly the UK and the euro area, along with continued expansion of the US economy will support Irish growth, relative to its recent lacklustre performance.
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