Eurozone economic confidence strengthened more-than-expected to a near decade-high in June amid widespread improvement across sub sectors.
The economic sentiment index rose to 111.1 in June, the highest since August 2007, from 109.2 in May, monthly survey data from the European Commission showed Thursday. The expected reading was 109.5.
Data came after the European Central Bank President Mario Draghi said the bank will need to be prudent in withdrawing monetary stimulus as that can be done only gradually with the euro area still in need of considerable policy support.
Peter Vanden Houte, an ING Bank NV economist, expects an announcement of the lengthening of the QE program until June 2018 for the September meeting, while a first 0.2 deposit facility rate hike is likely in the fourth quarter of 2018.
Data today showed that the industrial confidence index climbed to 4.5 in June, while it was forecast to remain unchanged at 2.8.
Rising industrial confidence was fueled by managers’ more optimistic assessment of the current level of overall order books and healthier assessments of the stocks of finished products.
The consumer sentiment index came in at -1.3, in line with flash estimate. The reading improved from -3.3 in May.
The strong increase in consumer confidence reflected more positive assessments of the future general economic situation, future unemployment and consumers’ savings expectations.
At the same time, the services confidence indicator rose to 13.4 from 12.8 a month ago. The slight increase in services confidence resulted from managers’ brighter demand expectations and the improvement in their views on the past business situation.
Further, data showed that the confidence index for retailers more than doubled to 4.4 from 2.0 in the previous month.
The marked rise in retail trade confidence was fueled by more positive views on both the present and the expected business situation, while managers’ assessment of the adequacy of the volume of stocks slightly worsened.
Another report from the EU showed that the business confidence index reached the highest level since April 2011.
The indicator rose to 1.15 in June from 0.90 in May. Managers’ assessments of the past production, overall and export order books and the stocks of finished products improved markedly.
However, managers’ production expectations remained virtually unchanged in June.
by RTT Staff Writer
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