Euro Zone Downturn Accelerates as Equities Surge

Consistent with the earlier flash reading, final PMI data showed a greater divergence between Germany and periphery economies. Specifically, Germany, along with Ireland, are alone in posting all-sector growth. Meanwhile, major economies like Spain, Italy, and even France are mired in economic contraction.

“Germany is on course to see the strongest quarterly growth since the spring of 2011, but France is contracting at the fastest rate for four years,” commented Williamson.

Also released on Tuesday was the February reading of the Markit/CIPS UK Services PMI index. The index experienced an increase from 51.5 to 51.8, indicating an accelerating rate of growth. The report’s measurement of business confidence hit a nine-month high, as expectations for a mid-2013 turnaround in the broader European economy grow.

“Service sector confidence about the year ahead also lifted to its highest since last May, contributing to a pick up in employment, and adding to the sense that the economy is reviving, albeit sluggishly and somewhat hesitantly, rather than sliding back into another recession,” commented Williamson. This statement about the U.K. report echoes how many market participants feel about the U.S. economy…