US third quarter growth revised up, eurozone economic sentiment improves

A report on Thursday showed that US third quarter GDP has been revised up to 2.7 percent from 2.0 percent reported last month. Inventory accumulation and exports contributed positively to the revision but consumer spending was cut to a 1.4 percent growth rate from 2 percent.

Another report from the US on Thursday showed that pending home sales rose 5.2 percent in October.

There was also good news for the euro area on Thursday. The European Commission's economic sentiment indicator rose to 85.7 in November from 84.3 in October.

Fed says US economy expanding, new home sales fall

The US economy expanded at a “measured pace” recently, according to a Federal Reserve report on Wednesday. From Bloomberg:

“Consumer spending grew at a moderate pace in most districts, while manufacturing weakened,” the central bank said in its Beige Book business survey, which is based on reports from the Fed’s 12 district banks. “Contacts in a number of districts expressed concern and uncertainty about the federal budget, especially the fiscal cliff.”

However, new home sales in the US fell 0.3 percent in October.

Diane Swonk notes that the decline “was concentrated in the South and Northeast; both were affected by Superstorm Sandy at the end of the month”.

However, she also notes that new home prices “firmed a bit”. Mortgage applications for purchase also continued to move up last week, suggesting that “the market will show renewed gains once we get further away from the disruptions created by Sandy”.

OECD global growth forecast revised down but US economic data remain positive

The Organisation for Economic Co-operation and Development has cut its global growth forecast for this year. It said on Tuesday that the global economy would grow 2.9 percent this year, down from a forecast of 3.4 percent growth in May.

However, in the US, economic data on Tuesday remained mostly positive.

The Conference Board’s consumer confidence index rose to 73.7 in November, the highest since February 2008, from 73.1 in October.

The US housing market continues to recover, with the S&P/Case-Shiller index of home prices in 20 cities rising 3 percent in September from a year ago after advancing 2 percent in the year to August.

Durable goods orders were flat in October. However, orders for non-defense capital goods excluding aircraft rose 1.7 percent.

Europe and IMF reach Greek deal, Chicago Fed index falls below level at start of last recession

Reuters reports a positive development in the eurozone sovereign debt crisis.

Euro zone finance ministers and the International Monetary Fund clinched agreement on a new debt target for Greece on Monday in a breakthrough towards releasing an urgently needed tranche of loans to the near-bankrupt economy, officials said.

After nearly 10 hours of talks at their third meeting on the issue in as many weeks, Greece's international lenders agreed to reduce Greek debt by 40 billion euros, cutting it to 124 percent of gross domestic product by 2020, via a package of steps.

Economic data from the US on Monday were not as positive.

The Chicago Federal Reserve reported on Monday that its National Activity Index decreased to -0.56 in October from 0.00 in September. The index’s three-month moving average decreased from -0.36 in September to -0.56 in October.

According to the Chicago Fed, October’s three-month average suggests that economic growth was below its historical trend. Indeed, the October reading was the lowest since November 2009 and lower than when the economy last entered recession in December 2007.

Production-related indicators contributed -0.45 to the index in October, down from -0.06 in September. The Chicago Fed said that Hurricane Sandy negatively affected industrial production in October.

Treasury bears capitulate

Bloomberg reports: “Treasury Bears Capitulate as Fed Buying Meets Cliff Worry”.

Until last month, Donald Ellenberger, who manages $10 billion for Federated Investors Inc., shunned Treasuries as the U.S. economy improved and 10- year notes yielded less than inflation. Now, he can’t afford to stay out.

Ellenberger has plenty of company. Bond bears from Brown Brothers Harriman & Co. to T. Rowe Price Group Inc. are buying Treasuries though the 1.69 percent yield on 10-year notes is less than the rate of inflation and returns on the $10.9 trillion of marketable debt are the least in three years.

The combination of Federal Reserve efforts to stimulate the economy by buying bonds and the potential slowdown should politicians fail to avert the so-called fiscal cliff of tax increases and spending cuts has made Treasuries the debt that money managers have to own. Even investors who shun Treasuries don’t see 10-year note yields rising much above 2 percent.

The contrarian investor has to ask: Is this a sign of a top in US Treasuries?

Stocks up as German and French business confidence improves

Stocks finished the week up on Friday, with European shares in particular posting their best weekly gain so far this year after rising for a fifth day.

Positive European economic data on Friday contributed to the gains.

In Germany, the Ifo business climate index rose to 101.4 in November from 100.0 in October.

In France, Insee's manufacturing sentiment index rose to 88 in November from 85 in October.

In Italy, retail sales rose 0.1 percent in September.

And in the UK, the British Bankers' Association reported that mortgage approvals increased to 33,039 in October from 31,544 in September.

Eurozone economy continues to shrink but Chinese manufacturing returns to expansion

Reuters reports that the euro area faces its deepest downturn since early 2009.

The euro zone economy is on course for its weakest quarter since the dark days of early 2009, according to business surveys that showed companies toiling against shrinking order books in November.

Service sector firms like banks and hotels that comprise the bulk of the economy fared particularly badly this month, and laid off staff at a faster pace...

"The concern about the outlook is getting worse as we move towards the end of the year," said Chris Williamson, chief economist from Markit.

According to Markit's flash report on Thursday, the service sector PMI for the euro area fell to 45.7 this month, its lowest reading since July 2009, from 46.0 in October even as the manufacturing PMI rose to 46.2, its best showing since March, from 45.4 in October.

The composite PMI rose to 45.8 in November from 45.7 in October.

Markit said that the PMIs were consistent with the economy shrinking around 0.5 percent in this quarter, which would be the sharpest contraction since the first quarter of 2009.

Another report on the eurozone economy on Thursday showed that consumer confidence in the region deteriorated in November, with the flash consumer confidence index falling to -26.9 from -25.7 in October.

Meanwhile, however, China's economy continued to show signs of improvement. A report from HSBC on Thursday showed that its China manufacturing PMI rose to 50.4 in November from 49.5 in October. This indicates that manufacturing activity in China expanded in November for the first time in 13 months.

US economic data turn positive but Japan's trade deficit worsens

Wednesday's data showed that US economic indicators are coming out positive again as the effects of superstorm Sandy dissipate.

Markit's flash manufacturing PMI for November rose to 52.4 from 51.0 in October. Initial claims for state unemployment benefits dropped 41,000 to 410,000 last week. The final reading of Thomson Reuters/University of Michigan's November consumer sentiment index came in at 82.7, slightly up from 82.6 in October but down from a preliminary reading of 84.9.

Leading indicators are also positive. The Conference Board's leading economic index rose 0.2 percent in October, slowing from 0.5 percent in September. The ECRI's weekly leading index rose to 125.7 in the week ended 16 November from 125.2 the previous week but its growth rate fell to 3.8 percent from 4.3 percent.

Japan's economy, though, showed further signs of weakness on Wednesday. Japanese exports fell 6.5 percent from a year ago in October. Imports were also down 1.6 percent from a year ago. That still left Japan with a trade deficit of 549 billion yen, the worst trade figure for October since 1979, when comparable data became available.

BoJ monetary policy unchanged, US housing starts jump to 4-year high

The Bank of Japan ended its monetary policy meeting on Tuesday without introducing fresh stimulus measures. The policy rate was left between zero and 0.1 percent.

In the US, determined easing by the Federal Reserve appears to have helped the housing market recover. Housing starts rose 3.6 percent to a 894,000 annual rate in October, the highest since July 2008. Building permits fell 2.7 percent though.

Bill McBride notes that despite the increase so far, “starts in 2012 will still be the 4th lowest year since the Census Bureau started tracking starts in 1959”.

However, he also thinks that the recovery is sustainable and that the “growth in housing starts should continue over the next few years”.

Housing markets improve in US, UK and China, France's credit rating downgraded

The US housing market appears to have escaped the effects of superstorm Sandy.

The National Association of Realtors reported on Monday that existing home sales rose 2.1 percent in October. That helped to push the number of previously-owned homes on the market down 1.4 percent to 2.14 million, the fewest since December 2002. Inventory is now just 5.4 months worth of sales, the least since February 2006 and down from 5.6 months in September.

The improvement in the housing market is also evident from home builder sentiment. The National Association of Home Builders/Wells Fargo housing market index rose to 46 in November, the highest level since May 2006, from 41 in October.

Meanwhile, there were signs of recovery in the UK housing market in November. Rightmove reported on Monday that average asking prices were up 2 percent year-on-year, the highest annual rate of increase seen in November since 2007.

China's housing market also appears to be stabilising. Prices in 35 out of 70 cities tracked by the government rose in October, up from 31 cities in September and the first increase since July.

The reports on the euro area on Monday, however, were not as positive.

Construction output in the euro area fell 1.4 percent in September.

Italian industrial orders fell 4.0 percent in September.

Finally, Moody's Investors Service downgraded France's sovereign rating to Aa1 from Aaa on Monday. It maintained a negative outlook on the country's rating.

Euro area in recession, Japan to follow

Last week's data showed that the eurozone economy has fallen into recession while Japan looks likely to follow.

A report last week showed that real gross domestic product in the euro area fell 0.1 percent in the third quarter. It had fallen 0.2 percent in the second quarter. This means that the eurozone economy has now declined for two consecutive quarters, a widely-used definition of a recession.

Another report last week showed that Japan's economy contracted 0.9 percent in the third quarter. It had grown 0.1 percent in the second quarter.

While Japan's economy has not suffered two consecutive quarters of decline, the prospects are not good. A report in the previous week had shown that the index of leading economic indicators had fallen in September for the fifth month in six.

Last week's economic data from the United States were also mostly negative, with retail sales and industrial production falling in October and initial claims for unemployment benefits surging in the week ending 10 November. The weakness, though, was mostly attributed to superstorm Sandy, so it is unlikely to last.

Indeed, a report from the Organisation for Economic Co-operation and Development last week indicates that until the storm, the US economy had actually been stabilising. The composite leading indicator for the US rose to 100.9 in September from 100.8 in August, the second consecutive monthly increase.

The improvement for the US helped keep the composite leading indicator for the OECD area as a whole steady at 100.2 in September.

The indicators for the euro area and Japan, however, pointed to continued weakness for these economies. The CLI for the euro area stayed at 99.4 in September while the CLI for Japan fell to 100.2 from 100.3 in August.

US industrial production falls, recession risk rises

US economic data have been coming out negative in recent days, with superstorm Sandy not helping.

The trend continued on Friday, with the Federal Reserve reporting that industrial production fell 0.4 percent in October. The Fed said the storm is estimated to have cut industrial production by almost 1 percentage point.

Manufacturing output fell 0.9 percent but was little changed excluding the effects of the storm.

Capacity utilisation fell to 77.8 percent in October from 78.2 percent in September.

Based on the latest available data, including Friday's industrial production report, Dwaine van Vuuren has estimated that according to the NBER recession model, the probability of a US recession is now “in double-digit territory for the first time in this expansion” and that “unless the US Congress does something constructive with the fiscal cliff issue a recession is virtually guaranteed in very short order”.

However, van Vuuren also noted that leading indicators have provided a less pessimistic picture. He said that while these indicators show that recession risks are rising, “provided there are no external shocks . . . or self-inflicted debacles . . . then the economy should continue to pick itself up even if it languishes for a few more months as the effects of Sandy filter through”.

Euro area in recession, US jobless claims surge

For a second consecutive day, both Europe and the US released negative data on Thursday.

The euro area fell into recession after real gross domestic product fell 0.1 percent in the third quarter following a 0.2 percent decline in the previous quarter. Germany and France grew 0.2 percent but Italy contracted 0.2 percent and Spain contracted 0.3 percent.

Another report on Thursday showed that eurozone inflation slowed to 2.5 percent in October from 2.6 percent in September.

In the UK, retail sales fell 0.8 percent in October, more than reversing a 0.5 percent increase in September.

In the US, a report on Thursday showed that superstorm Sandy drove initial claims for jobless benefits up by 78,000 to 439,000 in the week ended 10 November, the most since April 2011.

Factory production in the northeast was also hit. The Philadelphia Fed’s economic index fell to minus 10.7 in November from 5.7 in October. The Federal Reserve Bank of New York’s general economic index indicated continuing contraction despite rising to minus 5.2 this month from minus 6.2 in October.

Another report on Thursday showed that the US consumer price index rose 0.1 percent in October.

Europe, US report negative economic data

The poor economic dataflow from Europe continued on Wednesday.

Industrial production in the euro area fell 2.5 percent in September, the most in more than three years. The worst performances came from Ireland and Portugal, which saw 12.6 percent and 12.0 percent declines in industrial output.

Meanwhile, crisis-stricken Greece saw its economy contract 7.2 percent in the third quarter from the previous year, worse than the second quarter's 6.3 percent contraction, while Portugal's economy shrank 0.8 percent in the third quarter from the previous quarter.

Data from the UK were mixed. The jobless rate dipped to 7.8 percent in the three months through September from 7.9 percent. However, the number of people claiming jobless benefit rose by 10,100 in October, the largest increase since September 2011, after a jobs boost from the Olympics faded.

Across the Atlantic, the US failed to provide the usual offset to the negative data from Europe. Retail sales fell 0.3 percent in October, partly due to the impact of superstorm Sandy.

Greece gets reprieve on deficit over IMF objection

Finance ministers from the euro area have given Greece two extra years to trim its budget deficit. Bloomberg reports:

In the latest compromise in three years of crisis fighting, creditors led by Germany opted late yesterday to keep money flowing to Greece instead of risking a default that could lead to the nation’s exit from the euro and stir more turmoil for the countries that remain in the single-currency bloc.

Greece has made “far-reaching decisions that go in the right direction,” German Finance Minister Wolfgang Schaeuble told reporters in Brussels today. He said Greece’s aid program can be re-engineered to plug a financing gap of as much as 32.6 billion euros ($41 billion) without costing creditors a cent.

The decision came despite objections from the International Monetary Fund's Managing Director Christine Lagarde.

“Debt sustainability of Greece has to be measured in 2020,” said Lagarde, who was French finance minister when the crisis started. “We clearly have different views. What matters at the end of the day is the sustainability of the Greek debt.”

Meanwhile, German investor confidence remains weak despite the actions taken to resolve the sovereign debt crisis. The ZEW index of investor and analyst confidence fell to minus 15.7 in November from minus 11.5 in October.

What did rise recently is UK inflation. Consumer price inflation rose to 2.7 percent in October from 2.2 percent in September.

The acceleration in UK inflation came as house prices fell at their slowest pace in more than two years last month. The Royal Institution of Chartered Surveyors' house price balance rose to -7 in October from -14 the month before.

Japan looks set for recession

Asia kicked off the data reporting week on a weak note.

Japan's economy contracted 0.9 percent in the July-September quarter following growth of 0.1 percent in the prior quarter.

A decline in net exports accounted for 0.7 percentage points of the contraction after exports fell 5.0 percent.

Private consumption fell 0.5 percent while capital expenditure fell 3.2 percent, the fastest pace of decline since the second quarter of 2009.

“The GDP data confirms that the economy has fallen into a recession,” said Tatsushi Shikano, senior economist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo. “It is set for a second straight quarter of contraction in the current quarter.”

Meanwhile, in China, new local-currency loans by banks fell 14 percent in October from a year earlier.

And in India, industrial production fell 0.4 percent in September from a year earlier while exports fell 1.6 percent in October from a year earlier.

Markets fall in wake of US elections amid mixed economic data

Stock markets performed negatively last week.

In his market commentary, Doug Short noted that all eight indices that he tracks finished in the red last week. He noted that Japan's Nikkei 225 and Hong Kong's Hang Seng were the worst performers, losing over three percent, with the former falling back into the bear zone.

“The US presidential election took center stage of the world news media, and obviously the reelection of Obama was not what the market wanted,” he wrote.

Erik Swarts also noted the weak market performances but “found little merit in pinning the perceived surprise of short term market gyrations to an event as protracted as the US presidential elections”. Instead, he thinks that “the weakness in equities this past week was the byproduct of ongoing asset kinetics set in motion long ago”.

See his article for some charts of how several indices have been following the arcs of previous peaks.

Investors relying on economic data would have been given mixed signals last week.

In the US, the preliminary Thomson Reuters/University of Michigan consumer sentiment index for November showed a five-year high and exports hit a record in September.

In China, reports last week showed that industrial production, retail sales and fixed-asset investment all accelerated in October. A report over the weekend showed that exports rose 11.6 percent in October from a year earlier, up from 9.9 percent in September, while imports rose 2.4 percent.

However, European and Japanese reports last week showed continuing weakness in these economies.

In the euro area, Markit's composite index based on surveys of purchasing managers fell to 45.7 in October from 46.1 in September, staying well below the 50 mark. Other reports last week showed that retail sales in the euro area fell in September and German, French and Italian industrial production all fell in September.

In Japan, the index of coincident economic indicators fell in September for the sixth consecutive month. There is little respite in sight for the Japanese economy as the leading index also fell in September for the fifth month in six while the diffusion indices from the economy watchers survey and the consumer confidence index all fell in October.

China and US report positive economic data but Europe and Japan show more signs of deterioration

Worries over China's economy receded further after reports released on Friday.

Industrial production rose 9.6 percent in October from a year earlier, more than the 9.2 percent increase in September. Retails sales rose 14.5 percent in October compared with 14.2 percent in September. Fixed-asset investment excluding rural areas increased 20.7 percent in the first 10 months of 2012 from a year earlier compared with a 20.5 percent increase in the January-September period.

Inflation slowed to 1.7 percent in October from 1.9 percent in September.

There was also good news for the US on Friday.

US consumer confidence improved again in November. The Thomson Reuters/University of Michigan preliminary consumer sentiment index rose to 84.9, the fourth straight increase and the highest since July 2007, from 82.6 in October.

Also, with another report on Friday showing that inventories at US wholesalers rose 1.1 percent in September, third quarter GDP growth looks set to be revised significantly up from the initial estimate of 2.0 percent.

In contrast, the data from Europe on Friday were negative.

French industrial production fell 2.7 percent in September while Italian industrial production fell 1.5 percent.

Meanwhile, German inflation was unchanged at 2.1 percent in October.

The news from Japan on Friday was also negative, with the consumer confidence index for general households falling to 39.7 in October from 40.1 in September.

ECB and BoE maintain monetary policies, Japan reports negative data

Two major central banks concluded monetary policy meetings on Thursday without introducing any new monetary stimulus. The European Central Bank held its main interest rate at 0.75 percent while the Bank of England kept its main interest rate at 0.5 percent.

Economic data from Japan on Thursday were pretty gloomy.

The economy watchers' survey results released by the Cabinet Office showed weakening sentiment, with the current conditions index falling to 39.0 in October from 41.2 in September and the future conditions index falling to 41.7 from 43.5.

Another report from Japan showed that core machinery orders there fell 4.3 percent in September.

Meanwhile, lower exports in September helped push Japan's current account surplus down by 68.7 percent from a year earlier.

Trade data for Germany on Thursday were also not good. Exports fell 2.5 percent in September, the fastest decline since late last year. Imports fell 1.6 percent.

In sharp contrast, the US reported on Thursday that exports rose 3.1 percent to a record in September. With imports rising 1.5 percent, the trade deficit shrank 5.1 percent to the smallest since December 2010.

Obama wins, markets lose

US President Barack Obama won a second term on Tuesday but there was little celebration in markets. The S&P 500 fell 2.4 percent on Wednesday to 1,394.53, its lowest level since August. US yen-year yields fell 12 basis points to 1.64 percent.

The STOXX Europe 600 fell 1.4 percent on Wednesday, not helped by the European Commission cutting its growth forecast for the region to just 0.1 percent in 2013 from 1.0 percent.

Eurozone economic data on Wednesday were also negative.

Sales in the area fell 0.2 percent in September, reversing the 0.2 percent gain the previous month. Spanish retail sales plummeted 7.3 percent but sales in Germany and France rose 1.5 percent and 0.8 percent respectively.

Germany's industrial production fell 1.8 percent in September though. It was the sharpest drop since April.

Japan and Europe report negative economic data

There were lots of negative economic data on Tuesday.

Japan's index of coincident economic indicators fell 2.3 points in September, according to a preliminary reading from the Cabinet Office. The index of leading economic indicators fell 1.5 points.

Markit's composite index for the euro area fell to 45.7 in October from 46.1 in September. The index for services fell to 46.0 from 46.1 in September.

German factory orders fell 3.3 percent in September, the second straight drop and the biggest since September 2011.

UK industrial production fell 1.7 percent in September. While that was mainly due to maintenance work on oil and gas production facilities, manufacturing was also weak, growing just 0.1 percent after having fallen 1.2 percent in August.

Services slow in China, US and UK

Some of the major economies saw their services sectors slow in October.

Monday started off with HSBC reporting that its services PMI for China fell to 53.5 in October from 54.3 in September. While slower, the report showed that China's services activity continued to expand last month.

US services also expanded in October, albeit at a slower rate. The Institute for Supply Management's non-manufacturing index fell to 54.2 last month from 55.1 in September.

The UK services sector barely grew in October though. The Markit/CIPS services PMI fell to 50.6 last month from 52.2 in September.

US economy maintains growth at start of fourth quarter

The United States economy has been among the best performers among the developed economies in recent months and data last week suggest that that superior performance has persisted at least at the start of the fourth quarter, with the world's largest economy showing signs that it continues to grow even as the eurozone and Japanese economies continue to look troubled.

The US economy added 171,000 jobs in October, better than the 148,000 increase in September, better than the 125,000 increase estimated by economists surveyed by Bloomberg, and better than the 157,000 average monthly increase so far this year.

The continued recovery in the job market has helped to boost consumer confidence in the US. The Conference Board's consumer confidence index rose to 72.2 in October, the highest since February 2008, from 68.4 in September.

US manufacturing also accelerated in October. The Institute for Supply Management's manufacturing PMI rose to 51.7 last month from 51.5 in September.

In contrast, Markit's manufacturing PMI for the euro area fell to 45.4 in October from 46.1 in September, indicating a contraction in the eurozone manufacturing sector for a fifteenth successive month.

Another indication of economic weakness in the euro area was the European Commission's economic sentiment indicator for the region, which fell to 84.5 in October from 85.2 in September, the eighth consecutive decline.

Another economy that showed weakness last week was Japan's. Industrial production there fell 4.1 percent in September and a survey of manufacturers showed that production was expected to decline by another 1.5 percent in October before rising 1.6 percent in November. Indeed, the Markit/JMMA manufacturing PMI fell to 46.9 in October, the lowest level in 18 months, from 48.0 in September.

Fortunately, another key economy, China's, has held up better.

Manufacturing in China improved in October. The manufacturing PMI from the China Federation of Logistics and Purchasing and the National Bureau of Statistics rose to 50.2 in October from 49.8 in September while HSBC's manufacturing index rose to 49.5 in October from 47.9 in September.

Services also improved. The services PMI from the China Federation of Logistics and Purchasing and the National Bureau of Statistics rose to 55.5 in October from 53.7 in September.

US employment accelerates, eurozone manufacturing deteriorates

Reports on the US economy on Friday were positive.

US employment growth accelerated in October. Nonfarm payrolls increased by 171,000 after a 148,000 gain in September. However, the unemployment rate rose to 7.9 percent from 7.8 percent as a result of a larger labour force.

US factory orders rose 4.8 percent in September, the biggest gain since March 2011. Excluding transportation, orders rose 1.4 percent. Orders for non-defense capital goods excluding aircraft increased 0.2 percent.

European data on Friday were not as good. Markit's manufacturing PMI for the euro area fell to 45.4 in October from 46.1 in September.

US manufacturing expands, consumer confidence highest in over 4 years

US economic data on Thursday showed that the economy entered the fourth quarter on a positive note.

US manufacturing expanded in October, with the Institute for Supply Management’s manufacturing PMI rising to 51.7 from 51.5 in September. Markit's manufacturing PMI dipped to 51.0 in October from 51.1 in September but still indicated expansion.

A report from the Conference Board showed that its consumer confidence index increased to 72.2 in October, the highest since February 2008, from 68.4 in September.

US consumer sentiment has been boosted by an improving labour market. Private employers added 158,000 workers in October, the biggest gain since February, according to ADP, and initial claims for state unemployment benefits dropped 9,000 to a seasonally-adjusted 363,000 last week.

Another report on Thursday showed that construction spending rose 0.6 percent in September.

There were also some better data coming out of China on Thursday. China's official manufacturing PMI rose to 50.2 in October from 49.8 in September while HSBC's manufacturing index rose to 49.5 in October from 47.9 in September.

The improvements in manufacturing in October bypassed the UK though. The CIPS/Markit manufacturing PMI fell to 47.5 in October from 48.1 in September.

Eurozone unemployment hits record high

There were mixed data out of Europe on Wednesday.

In the euro area, the unemployment rate rose to a record 11.6 percent in September from 11.5 percent in August. Another report showed inflation in the region cooled to 2.5 percent in October from 2.6 percent in September.

German retail sales rose 1.5 percent in September, the second consecutive monthly increase, but French consumer spending edged up just 0.1 percent in September.

Beyond the euro area, consumer confidence in the UK fell in October, GfK's index falling to -30, the lowest since April, from -28 in September.

Data out from the US on Wednesday did not show their usual buoyancy. The Institute for Supply Management-Chicago's business barometer rose to 49.9 in October from 49.7 in September but remained below the 50 mark. The index for new orders did rise though to 50.6 from 47.4.