Chart of the week: eurozone confidence hits ten-year high

The eurozone is starting to motor. The Economic Sentiment Indicator (ESI), an index that tracks both business and consumer confidence in each country, jumped to 111.1 in June, the highest level since August 2007. Households finally seem to be gaining the urge to splurge, with the sub-index gauging consumer confidence at a 16-year peak. On past form, the ESI now implies a jump in eurozone annual GDP growth from 1.9% between January and March to 2.5%, according to Capital Economics, although the ESI has overstated growth in the past few quarters.

Viewpoint

"One of the things that seems strangely absent from most analysis of the oil price right now sinking fast under the weight of a glut in supply is any appreciation of the region's omnipresent geopolitical risks Trump in the White House means that [the new Saudi crown prince Mohammed bin Salman] will encounter minimum opposition from Washington and a far freer hand in pursuing his ambitions in the region. Arms deals to help him pursue them follow naturally. The dangers are obvious a newly empowered young prince unafraid, as we have seen in Yemen and now Qatar, to pursue regional conflict, emboldened by a world superpower."

Jeremy Warner, The Sunday Telegraph

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