France, the second-largest economy in the European Union, just released economic data that may leave you puzzled about the near- to mid-term economic future of the iShares France ETF.
- With unemployment expected to increase throughout 2010 to 10.5%, France’s economic recovery looks tentative, reports William Horobin of Dow Jones Newswires.
- According to the European Commission, the French economy is forecast to grow just 1.3% in 2010 and 1.5% in 2011.
- According to Nathalie Boschat of Dow Jones Newswire, a report by French statistics agency Insee shows that consumer spending fell 1.9% in the first quarter of 2010 compared to the same period last year.
- In addition, the deficit is set to grow to 8% of GDP in 2010 with debt expected to rise to 88.6% of GDP in 2011.
Data released concerning the services sector, however, is bit more upbeat. According to Vicky Buffery of Forexyard, “the Markit/CDAF final services purchasing managers’ index (PMI) jumped to 59.2 in April, its highest level since December last year and up markedly from a figure of 53.8 in March.”
Also, “the services new business index rose to its highest level since December 2009, at 60.0 compared with 56.1 in March, while work backlogs increased at their fastest pace in 44 months.”
And “in a further positive sign, PMI figures showed the labor market moved a step closer to stabilization in April, pushing the composite employment index to its highest in 22 months.”
iShares MSCI France Index (NYSEARCA:EWQ) seems to be taking the more negative news hard; it’s currently well below its 200-day moving average at this point and down 20.2% year-to-date.
Sumin Kim contributed to this article.