Angela Merkel's reign as chancellor has not started too auspiciously, with German business confidence falling in November.
German business confidence in November retreated from a five-year high, led by pessimism among retailers, as the European Central Bank prepared to raise interest rates and the country's new government announced tax increases.
The Ifo confidence index, derived from a monthly survey of 7,000 executives, declined to 97.8 in November. Economists expected the Munich-based institute's indicator to slip to 98.6 after reaching a revised 98.8 last month, the highest since October 2000, according to the median of 44 estimates in a Bloomberg survey. The euro fell and bonds rose.
But it's not all negative in Europe.
In contrast to today's Ifo report, business confidence in France, the largest economy in the 12-nation euro region after Germany, rose to a nine-month high, the French statistics office reported today. A report yesterday showed Italian consumers are the most optimistic in three years.
Meanwhile, Japan's trade surplus shrank in October.
Japan's trade surplus...fell 28.8 percent in October from the same month a year earlier to 822.1 billion yen ($6.93 billion), the Ministry of Finance data showed...
Imports jumped in October, driven by a 49.5 percent rise in the value of crude oil imports. Overall imports rose 17.8 percent to 5.09 trillion yen...
Exports in October rose 8.0 percent from a year earlier to 5.91 trillion yen, helped by higher exports of automobile and steel.
On a seasonally adjusted basis, the trade surplus was 719.7 billion yen, up 23.8 percent from September.
Perhaps more interestingly, Japan's core inflation rate moved out of negative territory in October.
Japan's consumer prices stopped falling in October for the first time since May, signaling that deflation may end soon, prompting the Bank of Japan to start reducing the amount of money it pumps into the economy.
Core prices, which exclude fresh food, were unchanged from a year earlier, the government's statistics bureau said today in Tokyo, matching a median forecast of 32 economists in a Bloomberg survey. Core prices fell 0.1 percent in August and September.
But it is still falling in Tokyo.
Core prices in Tokyo, home to one in 10 Japanese, fell 0.3 percent in November from a year earlier, the same as October, the statistics bureau said.