Euro zone economic sentiment beats expectations in April

Data released by the European Commission showed on Thursday that Euro zone economic sentiment improved more than expected in April and inflation expectations among companies and consumers rose. The improvement was broad-based across sectors with industrial, services and consumer sentiment all rising marginally.

Euro area economic sentiment rose to 103.9 this month from 103.0 in March, beating market consensus of a rise to 103.4. Business climate index rose to 0.13 in April, slightly below market forecasts of a rise to 0.14 and compared to an upwardly revised 0.12 in March.

Consumer expectations of price trends over the next 12 months rebounded to 2.9 in April from 2.1 in March, but remained well below the long-term average of 19.3. Companies' expectations of developments in producer prices also rose to -2.4 from a revised -4.6 in March.

“The increase in the headline index is unspectacular, but sends an encouraging signal that economic conditions improved slightly at the beginning of Q2,” said Pantheon Macroeconomics.