Euro-area business executives, like their American counterparts, are at their most optimistic in years as surging orders point to a strong start of the fourth quarter.
Markit Economics of London reported on Monday that its purchasing managers' index suggested a quarterly growth rate of up to 0.7 percent in the 19-member monetary union despite the slight drop in its composite index for services and manufacturing to 56 in October from 56.7 the prior month.
The positive outlook is likely founded in the gauge of new orders from the private U.K. company which rose to its highest level in over six years and the measure of employment that jumped to its best score since July 2007.
Economic confidence, another survey indicator, rose to its highest level in almost 17 years last month.
European firms are “focusing on buoyant demand from domestic markets, remaining firmly in expansion mode in line with expectations of stronger business and consumer spending,” said Markit's chief economist Chris Williamson in the note accompanying the release.
The apparent and anti-climactic end of the secession bid by Catalonia with the uncontested removal of the regional government of Carles Puigdemont by the Spanish Prime Minister Mariano Rajoy, is just one of the recent political events that, along with elections in Austria, the Czech Republic, Slovakia and Germany, had, at the beginning of the fall, seemed to threaten the economic and political unity of the EMU.
From its 33 month high on September 8th at 1.2092 the euro has slipped 4.1 percent lower against the dollar (1.1595, 12:07 ET).
ECB President Mario Draghi announced a reduction in the bank's bond purchases from 60 billion euros a month to 30 billion starting in January but by the lengthening the program to at least September 2018 he convinced markets that the governors were not ready to fully wean the euro-zone from quantitative easing. The euro fell 1.7 percent versus the dollar on the day, its largest single session descent in seventeen months.
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