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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (60371)	2/16/2005 1:46:15 AM
From: elmatador	Respond to of 74559

<Nul points for the Germans, Italians, Dutch and Greeks, who all saw their economies shrink in the final three months of 2004.> Watch Eurosclerosis in this 2005. This will put pressure in the Euro, which in its turn will be good for the USD. Euro will not climb dramatically. Eurozone economy Published: February 15 2005 13:30 \| Last updated: February 15 2005 19:17 Nul points for the Germans, Italians, Dutch and Greeks, who all saw their economies shrink in the final three months of 2004. Germany, the inveterate underperformer in European economic contests, saw no growth in the third quarter either and is thus flirting with its third recession in four years. The root cause, as intractable as it is familiar, was weak consumer spending which more than offset strong exports. Europe's off-key quartet should do a little better this year. In Germany, the government's long-drawn out labour reforms are expected to lift productivity from the autumn, though unemployment remains high. Meanwhile, rising business confidence and a strong stock market suggest higher corporate investment. But any improvement will come from a painfully low base: after Tuesday's nasty surprise, forecasts for German gross domestic product growth have dropped to about 1.2 per cent for 2005, only a smidgeon higher than last year. Unfortunately, France, Spain and Finland Europe's racier performers will probably slow in the coming months (France has artificially boosted domestic demand through temporary tax breaks). With eurozone GDP growth already down to 1.6 per cent year-on-year in the fourth quarter, the European Central Bank's official 2 per cent forecast for 2005 looks far-fetched. An early interest rate rise is surely out of the question for now. That is good news for investors in eurozone bonds. But nobody else will be singing Europe's praises.