A survey by Markit Economics of euro area purchasing managers in the manufacturing and services sectors rose to 48.2 in January from 47.2 in December. This means the region’s manufacturing and services output contracted at a slower rate than economists had estimated and adds to signs that the eurozone economy is seeing light at the end of the tunnel.
Meanwhile, European Central Bank president Mario Draghi suggested that the worst of the sovereign debt crisis may be over.
Sentiment among German investors jumped to the highest level since the start of the eurozone debt crisis in 2010, as the outlook for Europe’s largest economy continues to improve.
The investor confidence index, which is compiled by the ZEW Centre for European Economic Research, jumped to 31.5 in January from 6.9 in December. Economists polled by Bloomberg News had projected a modest rise to around 12.0 this month.
This is the highest level since May 2010, the start of the European sovereign debt crisis which culminated in the first bailout of Greece. It is also the biggest gain in 11 months.
In the US, existing home sales in December crept down by around one per cent compared to November, according to a report by the National Association of Realtors. However, amid ultra-low interest rates and strong investor demand, sales were still almost 13 per cent above the level they were in the same month the previous year. This is the 18th month of consecutive year-on-year increases.
During last year as a whole, existing home sales rose to their highest level in five years and registered their largest annual increase since 2004, confirming signals that the housing market has bottomed out amid record interest rates and strong investor demand.
The housing sector still faces difficulties, including conservative mortgage lending standards by banks and the fact that many Americans have too little savings to make a down payment to buy a home. Moreover, many mortgages are still delinquent or in the process of being foreclosed.
This article was compiled by Bank of Valletta plc for general information purposes only.