Market Overview

Eurozone Sentiment Improves

Eurozone Sentiment Improves
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The euro was steady above $1.24 on Tuesday morning after data on Monday showed that investors’ morale in the region was improving. The common currency traded at $1.2412 at 7:00 GMT on Tuesday, still under pressure from worries about another recession and political uncertainty.

Sentiment data on Monday showed that investors’ optimism increased in November after declining for the past three months. The survey showed that sentiment increased to -11.9 from -13.7 in October. The figure surpassed expectations and was likely the result of the European Central Bank’s pledge to step in with further easing measures if need be.

Most are expecting to see the bank increase its asset purchases over the next few months, especially after ECB President Mario Draghi hinted that the bank was laying the groundwork for further easing at last week’s meeting.

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However, several of the region’s largest economies are still struggling with high unemployment and stagnant growth, which has fostered feelings of resentment towards the single currency. In Spain, Catalan nationalists held an illegal vote on Sunday that ended with an overwhelming majority in favor of the region breaking free from Spain.

The Wall Street Journal reported that Catalan Leader Artur Mas supported the demonstration by casting his own vote, saying that the Catalan people have “earned the right” to choose their own destiny. Though the ballot will not be internationally recognized, there was a surprising turnout. Of the six million eligible voters in the region, 2.25 million turned up to voice their opinion, with 80.7 percent of those votes cast for the region’s independence.

Spain isn’t the only region facing political problems as a result of the financial crisis. Several other eurozone members, including Germany and Greece, have seen a major increase in support for nationalist parties that are often in support of exiting the currency union.

Posted-In: News Eurozone Commodities Forex Global Federal Reserve Markets Best of Benzinga


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