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ECB’s QE works its magic on Eurozone economic sentiment - ING

FXStreet (Barcelona) - Peter Vanden Houte Chief Economist, Belgium, Eurozone, at ING, comments that the jump in the European Commission’s economic sentiment indicator (ESI) to 103.9 in March from a revised 102.3 in February, bodes well for GDP growth.

Key Quotes

“This was significantly better than consensus (103.1). There was a sentiment improvement in all sectors, with industry confidence showing a 1.7 point increase on the back of more optimistic views on expected production and the level of overall order books. Also, the marked improvement in consumer confidence (+3.0) bodes well for the future.”

“The country breakdown, meanwhile, revealed further improvements across most of the core and periphery, with Italy (+2.4), Germany (+1.8) and Spain (+1.7) showing the biggest improvements. Greece on the contrary saw an across-the-board drop in confidence.”

“It seems as if low energy prices, the weaker euro and the buoyant financial markets on the back of the ECB’s QE are working their magic.”

“Selling price expectations increased in all sectors, while deflationary expectations also diminished in the consumer survey, another sign that QE seems to be managing to raise inflationary expectations.”

“With yesterday’s indicator the Eurozone continues its winning streak of above consensus sentiment indicators. GDP growth in the first quarter should now comfortably reach 0.4% quarter-on-quarter and could even be higher”

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