A chink of light for the euro zone
– James Saft is a Reuters columnist. The opinions expressed are his own –
Even without a huge fiscal boost or a hell-for-leather central bank, Europe could have a recovery, albeit a tepid one, on the cards by the end of the year.
Recent forward looking economic data is still grim, but hides within it the seeds of a rebound, as the absolutely brutal fall in manufacturing over the past six months burns itself out.
The euro zone’s economic situation is still dire and it still faces outsized risks; its banking system must deleverage and has the potential for disastrous losses while it remains unclear who in the world exactly is going to be buying enough goods to stoke a sustained recovery.
But nothing goes in the same direction forever, and absent a health or banking disaster it is reasonable to expect positive surprises from demand as the year wears on.
As those who are betting on a recovery are generally backing U.S. growth, that surprise when it comes could give a nice boost to European markets.
“There is good convincing evidence that the inventory cycle in the euro area is turning favorably,” said Aurelio Maccario, chief euro zone economist at UniCredit Group.
“their banks bigger?” “Asian competition for what is less?!” “their was generally less of a bubble!?” Demographic forces given the same weight as fleeting consumer/investor sentiment measures? Sounds like someone and his bottle of bourbon tried to meet a last-minute deadline.