Euro Zone Recovery

• European Central Bank (ECB) Quantitative Easing (QE) has pushed some short-term interest rates across the euro zone to negative levels.
• This helps to force money to move to potentially more productive assets.
• The Euro/$US has tumbled from near 1.40 last May to current levels near 1.10 (after touching below 1.05 last week).
• This assists the export sector and forces higher prices for imports to limit the deflationary impact.
• Oil prices have remained at lower levels, reducing transportation costs to both business and consumers.
• Led by Germany, recent economic data had shown signs of the beginning of economic recovery.

• The latest data show that this is gathering steam:

• Data firm Markit, which surveys more than 5,000 businesses across the eurozone, said Tuesday its composite purchasing managers index—a measure of activity in the manufacturing and services sectors—rose to 46-month high of 54.1 in March from 53.3 in February. A reading below 50.0 indicates activity is declining, while a reading above that level indicates it is increasing.
• more here: http://www.wsj.com/articles/eurozones-modest-economic-recovery-gathers-momentum-1427189791

• more here: http://www.ft.com/intl/cms/s/0/ed0eae0c-d204-11e4-a1a0-00144feab7de.html?siteedition=intl#axzz3VIgOUTGw

• Expectations are that this growth momentum will continue.
• It should continue to lift confidence levels among businesses and consumers.

• There are still some issues that are unresolved:
• The ongoing debt problems for Greece and the concerns as to whether they will remain in the Euro zone.
• Russian aggression continues to be a geo-political concern.

However:

Central Bank actions appear to have had the desired impact and while it is early going, the Euro zone appears to pulling out of the its long-standing economic stagnation.

Most importantly:

With Euro/C$ at 1.37... 

A European Vacation is still looking like an excellent option for the summer!!!

The views expressed are those of the author, Scott Tomenson, a Raymond James Financial Advisor, and not necessarily those of Raymond James Ltd. It is provided as a general source of information only and should not be considered to be personal investment advice or a solicitation to buy or sell securities. Investors considering any investment should consult with their Investment Advisor to ensure that it is suitable for the investor's circumstances and risk tolerance before making any investment decision. The information contained in this blog was obtained from sources believed to be reliable, however, we cannot represent that it is accurate or complete. Raymond James Ltd. is a member of the Canadian Investor Protection Fund.