The sense of optimism that the worst of the economic downturn has passed
and the outlook looking forward is much improved continues to spread
around the globe. Today the affirmation of this belief was reflected in
Germany as the ZEW investor confidence expectations # in their economy
rose to the highest level since June ’06, rising to 31 from 13 and well
above the consensus of 20. However, the jump was solely in the outlook
as the current situation fell and was almost 3 pts less than expected.
Less bad gives hope that things turn into good sooner rather than later
but there is still an acknowledgement that conditions are still
difficult and uncertain. The Euro is rallying to near its highest level
since early Jan in response, German bund yields are rising to the
highest since Nov ’08 and US yields are also higher as a result. Apr US
Housing Starts are expected to total 520k with Permits at 530k. Lower
will be better in terms of inventories.
