Eurozone -- Amusing Surprise

The EU faces strong economic headwinds this year. Most forecasters are expecting a recession.
The Markit Economics PMI data showed a steep downdraft in output since early 2011, furthered
by negative or contraction readings until the Jan. 2012 flash report.

Now, as Aristotle was fond of saying, "one swallow does not a summer make", but it is interesting
that as the EU moves into the new year, there is a sharp bounce in activity levels in evidence, and
one which comes in the wake of the ECB's massive collateralized loan program to the EU banks.
Sharp positive reversals in PMI following sizable declines in activity levels into negative
territory do not normally indicate errant positive "blips" in an ongoing, heavy duty downtrend. So,
economic headwinds and recession forecasts notwithstanding, it could be unwise to put the EU to
bed before we see more data.