Daily Comments: 2013-06-06 – European economy

The data flow out of Europe today is pretty bad. German factories orders missed and unemployment rose to record levels in France and Greece. Meanwhile the IMF admitted that Greece's delayed debt restructuring "provided a window for private creditors to reduce exposures and shift debt into official hands." Does any of this change my bullish bias on Europe's economy? No, I believe Europe will exit recession at some point in the second half of 2013.
My focus here is on the delta i.e. second derivatives - and they are pointing to an economy that is bottoming, helped of course by a less contractionary fiscal policy stance. The likely outcome is a move in Europe from a small GDP contraction as we have seen for six quarters (and likely a seventh when this quarter's data is released) to slight GDP...


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