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Uncertainty trumps positive euro zone data

Thursday, November 10, 2016 - 01:51

New data from Italy and France's fastest job creation in nine years points to a continuing recovery in the euro zone. But, as David Pollard reports, Trump's election triumph introduces a host of new uncertainties.

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French jobs picking up at their fastest in 9 years. Italy's industrial output posting a strong quarterly gain. The latest data is good news at home in the euro zone. Even as the US election has it searching for answers abroad. (SOUNDBITE) (French) FRENCH FOREIGN MINISTER JEAN-MARC AYRAULT SAYING: "The questions we want to ask are about the Paris climate change agreement: Donald Trump said he wanted to denounce it. The nuclear agreement with Iran: he wants to denounce it as well. You also mentioned NATO, free trade agreements, what will happen to those?" Trump's infrastructure spending talk has at least soothed market reaction to the US vote. He has previously promised to allocate up to one trillion dollars to rebuild roads and bridges. (SOUNDBITE) (French) MANAGING DIRECTOR OF MONTSEGUR FINANCE, FRANCOIS CHAULET, SAYING: "The main idea is that Mr. Trump's program leans towards, what we call, 'reflation', the return of an expansionist and inflationary policy, which is rather reassuring." German and French bond yields have touched six-month highs on bets that that - and protectionist trade policies - could boost inflation. Leading, it's feared, to more uncertainty. The other concern for markets is the political impact of a Trump victory. (SOUNDBITE) (English) CMC MARKETS ANALYST, JASPER LAWLER, SAYING: "If this populism from Brexit to Donald Trump getting victory extends into the AFD in Germany, Marine Le Pen in France - those kinds of people coming to power - that would pretty much be the end of the European Union of the euro zone. So that is a big risk." In the meantime, the European Commission has just revised down its euro zone growh forecast. And Britain's. (SOUNDBITE) (English) EUROPEAN ECONOMIC AND FINANCIAL AFFAIRS COMMISSIONER, PIERRE MOSCOVICI, SAYING ABOUT THE EU COMMISSION'S ECONOMIC FORECASTS FOR BRITAIN: "Growth is projected to decline, to be almost divided by two to one percent in 2017. This reflects what we estimate could be the impact of Brexit vote on the outlook." With major votes across the continent now just months away, Europe's politicians too find they have questions to answer.

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Uncertainty trumps positive euro zone data

Thursday, November 10, 2016 - 01:51