Sound bites: Eurozone economic confidence still reasonably upbeat despite an April slowdown

Eurozone economic confidence has only experienced a shallow slowdown in April to 102.0 from 102.5 in March. In general, Eurozone economic sentiment is still defying the laws of economic gravity. Despite the proximity of recession risk, fragile recovery, near record unemployment and chill political headwinds blowing in from the Ukraine, economic confidence is still reasonably upbeat. However, there are still fatal flaws in the Eurozone recovery and economic confidence is not out of the woods just yet. Domestic credit contraction, debt deflation and ongoing fiscal austerity still pose major fault lines for the recovery ahead. The ECB still needs to have their wits about them and must be quick to inject more stimulus into the economy. The Eurozone clearly needs easier and negative interest rates and the ECB needs to bring in real quantitative easing. There are still major external risks to contend with ahead. A bigger blow-up in the Ukraine crisis, the slowdown in the emerging markets and the loss of momentum in China’s economy could all derail confidence and the Eurozone recovery ahead. There are still tough times ahead for the Eurozone and economic confidence remains vulnerable and exposed. The ECB still needs to do a lot more shoring up to protect the recovery over the future. Eurozone rates could stay close to zero for many more years to come.