The European Confidence , previously damaged,continues to improve during November.This improvement attained its highest level during november since the collapse of Lehman Brothers Holdings Inc. This suggest that the recovery of the euro zone has began to establish.
The European Commission announced that an index of executive and consumer sentiment is on a permanent rise and this rise surpassed all the estimations and previsions of the experts.
Several actions were taken to help the euro zone to emerge from its crisis.In effect,governments spent billions of euros on stimulus packages and the European Central Bank significantly decreased the borrowing costs close.
According to Leaders in the ciment and cars industries,the beginning of the restablishment of their profits has began.The global demand is on its way to recovery.
The euro did not change much against the dollar after the release of the report. It decreased by 0.7 percent on the day on the forex market. The yield on the 10 years German Treasury bond remained unchanged at 3.16 percent.
According to the OECD forecasts, The global economy is likely to expand by 1.9 percent next year and by 2.5 percent in 2011. The OECD expect the economy to grow 0.7 percent in 2010.The european GDP may increase by 0.9 percent next year.These OECD forecasts come to strenghten the financial and economic optimism taking place.
To support this view, the data shows that Europe’s manufacturing and services industries knew a growth in their sales for a fourth month in November.Also,on the forex market, European forex investors became more optimistic.This improvement in business confidence is also significant in Germany and it became more pronunciated during November.
This optimism expand to include the world leading enterprises such as Bulgary spa, Germany’s Porsche SE and Volkswagen AG car manufacturers but this optimism is still characterized as a cautious one.
The Dow Jones Stoxx 50 Index has increased by 14 percent in 2009 on the Forex market. Also, the DAX Index has increased 2 percent in the past three months.This increased allowed gains up to 16 percent in 2009.
ECB President Jean-Claude Trichet announced that he expect a “gradual” recovery. The ECB purchased covered bonds and injected billions of euros into forex markets to restablish the lending capacity.
According to members of the ECB council, the worst of the crisis has already been manifestated but the recovery is still uncertain and covered with difficulties and uncertainties.
Exports are threatened by a decrease in the competitiveness because of the euro appreciation against the dollar.This appreciation is very significant at a 16% level and it is manifestated since mid- February.All theses factors may just constitue the road block to recovery. The biggest danger comes from China: the yuan is kept mainly unchanged versus the dollar for more than a year.Thus the euro area is still exposed to the dollar’s depreciation.
This fall of the dollar is threatening the sustainibility of the profits of the world largest industries.Profits has decreased by as much as 77% because of a weaker dollar on the forex market .These damaged parties are watching very carefully the developments in forex currency markets as these developments may damage their economic and financial viability.
Companies are struggling to minimize their costs.This is not with no effect on the job market.Employment is seriously threatened thus putting at stake the global demand recovery.In theses conditions, the ECB announced that it will not withdraw its stimulus measures soon.
According to this report,European households anticipate a further decline in prices . A indicator of consumers’ forex price expectations showed a relative increase comparing to the past month.
Forecasts on the economic development and inflation will be released by the ECB on Dec. 3 during the monthly meeting of the policy makers
