Germany’s ZEW index, which measures investor sentiment, rose for the first time in 11 months, underpinning hopes that Europe’s largest economy has averted a recession.

The widely-watched index, which aims to predict economic developments six months in advance, increased to 11.5 in November. Economists expected the ‘economic sentiment’ part of the index to rise just out of negative territory for November, to 0.5, from -3.6 in October.

Last month’s reading was the first negative reading for nearly two years, but this month’s figure has soared well above zero. These figures come after Germany’s third quarter GDP growth was confirmed at a dismal 0.1 per cent, barely avoiding a technical recession.

In the meantime, the composite purchasing managers’ index (covering both manufacturing and services) in the eurozone, which is seen as a growth indicator, unexpectedly dipped again in November to 52.4. The PMI for manufacturing alone fell to 50.4 from 50.6 in October. The PMI for services also dipped to 51.3. This suggests that the eurozone is still battling with slow growth.The European Central Bank has been supplying money to the banking system by buying bonds and offer long-term loans to banks in an attempt to keep the eurozone from slipping into deflation.

Finally, sales of existing homes in the US rose by 1.5 per cent in October, as September’s sales increase was revised slightly up. The October home sales annualised level of 5.26 million units was the highest in a year. This is the latest sign that the US housing market is weathering last year’s jump in mortgage rates.

Separately, consumer prices in the US, as measured by the consumer price index, were flat in October as falling fuel prices offset increases in housing, medical and airline fares. Economists expected a decline in prices of 0.1 per cent.

Energy prices dropped for the fourth straight month by a seasonally adjusted 1.9 per cent.

Consumer prices have risen an unadjusted 1.7 per cent over the past 12 months, slightly below the annual average over the past decade.

This article was compiled by Bank of Valletta for general information purposes only.