Eurozone’s consumer morale shows some sign of recovery

Julian Harris
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UMER confidence in the euro area has jumped sharply in the first month of 2013, a survey showed yesterday, while separate data revealed that the debt ratios of Eurozone governments are beginning to stabilise.

And on a rare day of positive figures for the single currency area, Portuguese debt yields fell to their lowest since late 2010. Investors were heartened by strong demand at Portugal’s first bond market foray since its 2011 bailout. They bid around €10bn (£8.4bn) for Portugal’s reopening of its October 2017 bond, five times more than the €2bn the Treasury sold, allowing it to borrow at a relatively low cost. Subsequently, Portuguese two-year bond yields fell 29 basis points on the day to 3.125 per cent, their lowest since October 2010.

Meanwhile, across the Eurozone, consumer morale rose to an index score of minus 23.9 this month from a December figure of minus 26.3, the European Commission said – suggesting households can help boost the bloc’s economy.

The Eurozone remains mired in a debt crisis, yet separate figures from Eurostat show that its states’ debt to GDP ratio stood at 90 per cent in the third quarter of 2012, only slightly up from 89.9 per cent in the previous quarter.

There was still some food for bears in yesterday’s data, however, as the Bank of Spain reported that Spanish GDP shrunk 0.6 per cent in quarter four of 2012. And in France business morale has worsened, according to statistics group Insee. Its confidence index fell from 89 to 86 this month.