Risk to the upside in the U.S. contrasts to Europe

Today’s commentary
Summary: The latest data out of Europe shows the economy in the euro zone continuing to expand and suggests that we are probably in a technical recovery. In Europe, however, the threat to recovery is to the downside, whereas in the U.S. the main threat is to the upside in the form of asset bubbles.
According to Markit’s Manufacturing Purchasing Manager’s Index released this morning, the eurozone’s manufacturing sector expanded for the fourth month on the trot. While the PMI was still a relatively weak 51.3 in October, up from 51.1 in September, 50.0 is the demarcation line between expansion and contraction. Only Greece and France saw readings below 50.0, demonstrating that the cyclical upturn is widespread.
At the same time, economic data from the U.K., the U.S. and C...


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