Eurozone: Sentiment and lending surprise to the upside - ING

Bert Colijn, senior economist at ING, notes that Eurozone’s economic sentiment surged from 103.9 to 105.1 in May and lending picked up in April.

Key Quotes

“This bounceback in eurozone sentiment comes as a pleasant suprise after a poor reading in April and weak readings for the PMI and IFO.”

“Moderate growth, therefore, seems to be the way forward according to the ESI. The improvements were mainly led by improved optimism about the months ahead for both industry and services. This is not because of improved new orders though, which still declined in May. Industry data was poor in general as the recent production trend dropped significantly and so did employment expectations. This seems in line with a modestly weaker GDP growth rate in Q2 than Q1.”

“Today’s lending data shows that loan growth to non-financial corporations has improved from 3.6% to 3.9% YoY in April, with loan growth to households accelerating to 3.4% YoY.”