Euro-Zone Economic Confidence Rises to Six-Month High in May

The Euro-Zone Economic Sentiment Indicator (ESI) jumped to 69.3 from 67.2 in the previous month. The reading for industrial sentiment confidence improved to -34 from -35, while consumer confidence remained steady at -31. The reading for services confidence improved to -23 from -24 and the reading for retail sentiment jumped to -15 from -20. Construction sentiment remained steady at -34. The overall ESI reading is the highest in six months, boosted by record low interest rates and government spending plans. Data back the view that the worst is over and that growth is likely to stabilize slowly in the second half of the year. This also backs our view that the ECB is unlikely to cut the refi rate further.