Euro-zone Economic Confidence Shows Recovery on the Way

Euro-zone economic confidence in November showed signs of improvement delivering signal that the region is getting on rail of recovery.

Indicator of consumer sentiment rose to 88.8, European Commission figure say. This figures appear to be higher than expected level of 88. Manufacturing and services rose for a fourth straight month spurring up the degree of business activity in 16-nation region.
A better than expected result is mainly driven by ECB`s stimulus programs and its policy of close to zero rates. High unemployment rate and rising Euro are the sources of concern, threatening to slower recovery.

The business activity indicator inclined to -1.56 from revised -1.79 which is higher than the estimated -1.65. European consumer confidence in November rose to -17 better than prior -18 matching expectations. The news affected Forex market investors encouraging them to buy Euros.

Earlier the ECB Chairman Jean-Claude Trichet expressed the idea that the Euro-zone`s recovery will continue growing steadily in 2010. The bank made a decision to buy covered bonds and gave billions of euros to markets within the frames of its emergency programs.

ECB`s Decision Spurs the EUR for a Jump

Yesterday the ECB announced it would lend banks 75.2 billion euros for a year term at the current interest rate of 1%. The number appeared to be lower, than it was anticipated by the experts. The EUR/USD currency pair achieved the level of 1.4634 from 1.4581 point marked on Tuesday. Loose economic policy measures encourages traders who use trading software to choose risky assets for trading.

The unexpectedly low PMI report added to a mixed results of U.S. data released Wednesday, including an improved second-quarter U.S. GDP report, but disappointing U.S. jobless claims, confirming investors' speculations that a sustained economic recovery won't take hold.

The GBP has continued its further falling against other currencies traded on the Forex currency market, unable to shake off the comments by Mervyn King Bank, the Bank of England governor that a weak Pound would be an advantage for the U.K.'s recovery from the global downturn. In today's trading the GBP is at $1.5942 versus the USD.

Today the ministers of finance of EU countries meet in Sweden to discuss further direction of the European economy.

Oracle Releases Profit Report

Tuesday, June 23 Oracle Corp. is expected to release declining sales for the fourth quarter of the year, but according to some experts the business software company finished the period strongly. Oracle is scheduled to report its quarterly results when the market closes. The company is now on the way to finish its $7.4 billion take-over acquisition of Sun Microsystems Inc., a transaction that stunned the technology world when both companies announced it in April. The transaction is supposed to close this summer. This deal is supposed to take Oracle into the market of hardware, an brand new area for the company until now.

As experts state Oracle will post profit of 44 cents per share on $6.47 billion in revenue, that will constitute a 11 percent decline from last year.

Yen Remains Stable

Asian stock markets were largely negative on Wednesday, with investors doubting how fast the U.S. recession is easing after a mixed set of economic indicators on the forex market.

"The Japanese yen is the strongest currency, gaining ground across the board, particularly against the U.S. dollar. While the BoJ again raised the assessment of the economy, indicating conditions had stopped deteriorating, the announcement was expected," BBH said.
The yen's gains may be more closely tied to a rights issues from Sumitomo Mitsui, where there is talk that foreign demand could account for half the demand, BBH said.
Late Tuesday morning, the dollar is at Y96.41 from Y97.84 after having dipped to Y96.08, its lowest level since June 4 according to EBS.

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