Euro zone sentiment up, German retail sales down: a mixed bag of data has economists scratching their head over the European economy, and over what the ECB's Mario Draghi might do next. David Pollard reports.
A wave of labour unrest in France ... A wave of flooding in Germany ... The euro zone's two senior economies have their problems. Though retail sales in Germany were already down before this latest weather damage. And inflation there is still at zero. But - with French GDP picking up ever so slightly - and euro zone economic confidence also on the up - a mixed picture gets a mixed response. (SOUNDBITE) (English) CO FOUNDER, SEVEN INVESTMENT MANAGEMENT, JUSTIN URQUHART STEWART, SAYING: "Every time you think one area is recovering, the other part is actually not so good. So a few months ago, we had Germany doing pretty well, and France flat as pancake, or flat as a crepe .... Now France is showing some signs, but still pretty weak overall. " The situation blurred for the continent's jobless too - latest data showing Germany's unemployment at a record low. But Italy's still creeping up - amid the danger of a long-term, unwanted legacy. (SOUNDBITE) (English) CO FOUNDER, SEVEN INVESTMENT MANAGEMENT, JUSTIN URQUHART STEWART, SAYING: "Remember, the damage has already been done for the euro, with youth unemployment. That's a generational issue, and is never going to be recovered." And - with the ECB meeting this week - a puzzle too for Mario Draghi. How to generate more confidence in his QE programme .... (SOUNDBITE) (English) CO FOUNDER, SEVEN INVESTMENT MANAGEMENT, JUSTIN URQUHART STEWART, SAYING: "The problem for Draghi is: where do I actually find the next spark of enthusiasm to actually get demand up? At the moment, he's got a box of matches with a rather wet bonfire. It creates smoke, but not a lot of heat." And still nowhere near enough to push euro zone inflation anywhere near to the ECB's target of close to two percent - the latest reading still negative.