What's going on?
Data released on Wednesday suggested that November might just be the busiest month for eurozone economic activity so far this year!
What does this mean?
The eurozone economy has been picking up momentum recently, but Wednesday’s survey of businesses and their activities marks another leg up. As was also the case in October, the “new orders” component of the survey (basically how businesses see their near-term prospects for sales) improved at the fastest pace this year – which suggests that economic growth will keep accelerating.
Why should I care?
The bigger picture: Inflation appears to be increasing – even in Europe.
While inflation has been ticking up in America, it has been slower to do so in Europe. The survey data showed that prices that companies charge (on average) went up for the first time in over a year. Also, the rate of new hires tied for the fastest monthly pace since 2008 (and as more workers get hired, pay usually goes up, which helps push up inflation since people can afford to pay more for things).
For markets: Markets are wondering how a stronger eurozone economy will impact the policies of the European Central Bank (ECB).
The ECB is still buying a large amount of government bonds every month in order to support the economy (how does that support the economy? Click here). The bond buying program is due to end in March, but it’s very likely that the program will be extended. However, as the economy improves, it becomes less necessary for the ECB to support the economy. If the ECB were to buy fewer bonds, it would very likely be bad for bond prices.