News Regulators 

Eurozone inflation rebounds as Christine Lagarde begins her ECB presidency

“The ECB aims for an inflation rate of just below 2%, but has failed to meet that goal in a sustained fashion for many years” writes Paul Hannon for marketwatch.com. The eurozone’s annual rate of inflation rebounded in November after two straight months of decline, but remained well below the European Central Bank’s target. Source: marketwatch.com

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Eurozone inflation firms but still below central bank goal

“Stripping out those items, as well as energy costs, the so-called core inflation rate also increased, to 1.3% from 1.1%” writes The Associated Press for seattletimes.com. That suggests underlying inflation partly related to wage increases may be firming.BRUSSELS (AP) — Official figures show that inflation across the 19-country eurozone rose in November but remains way below the level that the European Central Bank and its new president, Christine Lagarde, would like it to be. Still, inflation, by whatever measure, is below the ECB’s aim of near 2%. Source: seattletimes.com

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Eurozone flash manufacturing PMI limps up to 3-month high in November

“The flash reading of the eurozone manufacturing purchasing managers index rose to a 3-month high of 46.6 in November, up from 45.9 in October” writes European Markets Editor for marketwatch.com. The PMI was slightly above the FactSet-compiled economist consensus for a 46.4 consensus, but below the 50 level, indicating purchasing managers were reporting contractionary conditions.The flash services PMI meanwhile fell to a 10-month low of 51.5 in November from 52.2, which was below economist expectations for a 52.4 reading.”Manufacturing remains in its deepest downturn for six years amid ongoing trade…

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European Union trims growth forecasts

“Despite slowing economic growth, the EU expects unemployment to continue its decline to 7.6% by yearend, compared with a May forecast of 7.7%” writes Emre Peker for marketwatch.com. The European Central Bank’s new president, Christine Lagarde, is looking to bridge divides over ultraloose monetary policies to revamp growth.Meanwhile, EU policy makers are at loggerheads over how to revive the stagnating eurozone economy.BRUSSELS–Europe’s economy is settling into a pattern of “subdued” expansion as global trade tensions weigh on the export-oriented bloc, the European Union said Thursday, slashing growth expectations and calling…

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Here’s why European leaders may let an economic slowdown morph into a serious crisis

“So the odds are that European governments will wait until the slowdown degenerates into a serious crisis before they act” writes Senior Writer for marketwatch.com. Meanwhile, fiscal policy remains roughly neutral.In an era where interest rates are near zero or even negative, more borrowing doesn’t necessarily increase the debt load, as Olivier Blanchard, the former IMF chief economist, has noted.The irony is that the eurozone owes part of its greater fiscal flexibility to the central bank’s policy.The countries with high levels of public debt – Italy (more than 130% of…

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News Stocks 

Why JPMorgan says it’s time to switch to Europe stocks from U.S.

“The JPMorgan analysts point out the eurozone stocks are underowned, after stocks have dropped 20% in U.S. dollar terms over the past 18 months” writes European Markets Editor for marketwatch.com. That’s the backdrop for European stocks, and it’s no surprise they have struggled versus their U.S. counterparts.But analysts at JPMorgan say there’s a tactical window of opportunity for the eurozone as they upgraded stocks on the Continent to overweight from neutral — and downgraded U.S. equities to neutral from overweight. In dollar terms, the Stoxx Europe 600 SXXP, +0.40%  …

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Markets News 

Ultra-low interest rates are placing European housing markets at risk of a bubble, UBS says

“Ultra-low interest rates are putting eurozone housing markets at greater risk for a bubble” writes European Markets Editor for marketwatch.com. The UBS index is a weighted average of price-to-income, price-to-rent, mortgage-to-GDP, construction-to-GDP and relative price-city-to-country indicators.In fact index scores rose in all the cities in the eurozone UBS evaluated.Affordability issues, political uncertainty and less favorable tax treatment are putting pressure on house prices in London, UBS said, as Britain’s capital city moved out of bubble risk territory. Source: marketwatch.com

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