Euro Zone Economic Sentiment Improves, Italy Raises

Arthi Gupta
29 Nov, 2012
New York City

The sentiment across the euro zone improved after falling for eight months in a row. Italy raised

[R]12:20 PM Frankfurt – The sentiment across the euro zone improved after falling for eight months in a row. Italy raised €6 billion in bond auction today at lower borrowing costs. German unemployment rate remained unchanged in November.[/R]

European markets traded higher after the latest survey from the European Commission showed an increase in confidence for the first time in November. Italy sold €6 billion of debt at lower yields.

In Paris trading, the CAC-40 Index rose 36.03 or 1% to 3,551.22 and in Frankfurt the DAX Index edged higher 51.37 or 0.7% to 7,394.39.

The yields on Spain’s benchmark fell eight basis points to 5.25%. Italian 10-year yields declined eight basis points to 4.51%.

The latest survey from the EC showed sentiment indicator in November increased 1.4% to 85.7, an increase for the first time after falling for eight months in a row. Investment in industry expectations indicator fell 1%, raising the prospect of a weak recovery in the next year.

The Commission also estimated 0.1% growth in the euro zone in 2013, however estimates from O.E.C.D and other private estimates forecast a recession. The survey also indicated a decline in consumer confidence across the euro zone.

Italian Bond Auction

Italy sold €6 billion or $7.8 billion of five- and 10-year debt at lower yields today.

Italy sold €2.98 billion of 10-year bonds at an average yield of 4.45% compared to an average yield of 4.92% at the previous auction on October 30.

The country also sold €3 billion of five-year bonds at an average yield of 3.23% compared to an average yield of 3.8% in the last auction.

Euro Area Leading Index Drops

Euro zone leading economic index declined in October, the Conference Board said today.

The Conference Board Leading Economic Index for the euro area decreased 0.2% in October to 104.9, after decreasing 0.3% in September.

The Conference Board Coincident Economic Index for the euro area, which measures current economic activity, remained unchanged in October. The index now stands at 102.2.

German Jobless Rate Flat

Germany''s unemployment rate remained unchanged at 6.9% in November, data from the Federal Labor Agency showed today.

The number of unemployed rose by 5,000 to 2.94 million from a month earlier in November.

Swiss Economy Rebounds

The Swiss economy expanded more than estimated in the third quarter, according to the latest data from the State Secretariat for Economic Affairs released today.

The real gross domestic product for Switzerland expanded 0.6% in the third quarter compared with the second quarter, with private and public consumption and the balance of trade in goods contributing towards the growth in GDP.

UK Home Prices Fall

The UK home prices declined in November, according to the results of a house price survey released by the Nationwide Building Society today.

Home prices fell 1.2% from a year ago in November following a 0.9% decline in October.

On a monthly basis, average home prices remained unchanged in November compared to the 0.6% gain in October. A typical home is now worth £163,853.

Separately, the UK broad money supply (M4) excluding intermediate other financial corporations increased £6.8 billion in October compared to an average monthly increase of £6.9 billion in the previous six months, according to the latest data from the Bank of England released today.

In the three months to October, M4 growth rose 5.4% from a year ago.

M4 lending excluding intermediate OFCs decreased by £0.8 billion in October compared to an average monthly decrease of £0.1 billion in the previous six months.

From a year ago for the three months to October, the M4 declined 1.5%.