Good news in Europe is good news for all of us given the size of that economy. Britain is showing signs of mild improvement, as is Ireland. The bond market is also happy with the progress being made to improve economic conditions in Europe. Yields on 10-year Greek bonds have fallen to 8.01% (remember when they reached 25%?). Italy and Spain are borrowing at 3.92% and 4.17%, respectively. These are welcome and noticeable improvements as they reflect an increased confidence in the future of the region.
Spain has provided other more qualified good news. This troubled economy reported its first monthly trade surplus in 40 years (exports exceeded imports). This does not mean an end to the recession, and it no doubt has a lot to do with a slump in domestic demand for imported goods.
However, domestic manufacturers have reduced sales to other EU nations by about 8.1%, but overall exports rose by about 2.0% as Spain looks to new opportunities in the US, Africa and elsewhere. Increased exports bring hard currency into Spain, and if the one-month event becomes a trend, this should help firms in Spain become more stable through the near term and to increased employment in the future.
