German retail sales and French consumer spending surged in May, while euro zone economic sentiment is at an almost 10-year high. As David Pollard reports, the upbeat numbers continue to surprise to the upside for the euro zone - and raise expectations that the ECB could tighten monetary policy sooner rather than later.
The Reichshof, Hamburg. This is where the UK's Theresa May and the Indian prime minister will be staying. This, reportedly, Donald Trump's accommodation. Germany plays host to world leaders at the G20 summit next week. A chance for it to show off top hotels ... and a five-star economy. SOUNDBITE (English) IG SENIOR ANALYST, CHRIS BEAUCHAMP, SAYING: "The eurozone continues to be, I think one of the main places to be for the next six months, if not heading into 2018. The weaker euro has undoubtedly helped matters over the last couple of years and that really has had a bearing." Therein lies one potential problem. Mario Draghi's perceived hints of ECB policy tightening to come have driven the euro up - sharply. This quarter could see its strongest rise in six years. And the latest numbers do confirm the recovery's more than just cosmetic. German and French consumer spending is surging, euro zone economic sentiment is at a ten-year high. Though any eventual tightening might be easier said than done. (SOUNDBITE) (English) BGC PARTNERS MARKET STRATEGIST, MIKE INGRAM, SAYING: "There are a lot of moving parts, there a lot of people to try and keep happy. Effectively what you got with the ECB is a one size fits no one sort of policy. So I think it's inevitable you're going to see a certain amount of sabre rattling. It's likely that some of these voices are going to get rather more strident." Others say they'll wait to see what ECB policymakers do, not what they say. But in the meantime, Europe's share markets too, have the scent of tightening in their nostrils. A broad sell-off putting June on course to be their worst month in a year.