Euro-zone activity indicators have maintained a slightly firmer tone over the last month, providing tentative signs of an upturn in the region’s economy. Nonetheless, those indicators generally suggest that the currency union still posted a seventh consecutive contraction in the second quarter. What’s more, the recent renewed rise in financial market pressures – which has seen euro-zone equity markets fall and government bond yields rise in line with those in the US in response to an expected tapering of the Fed’s asset purchases - could threaten to snuff out the fragile recovery before it gains any real momentum.
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