The eurozone is fully recovered from the sovereign debt crisis

The European PMIs that came out today showed an EU economy that is not just in full recovery mode, but booming. Likely the ECB will reduce its level of accommodation in line with this growth.

Focusing just on the Eurozone, we know that the ECB had expected the Eurozone economy to grow only 1.7% in 2017 when that year began. But now, as 2018 begins, the ECB has bumped up its expectations for growth to 2.4%. Look at the PMI numbers behind that change in expectations:

The trend is straight up, with the slope of that uptick accelerating at the end of 2017. This bodes well for Eurozone growth. But it also means that ECB monetary policy in 2018 is likely to be more hawkish than it is currently.

Update: also see the next posts here, here and here for more on the nuances behind this statistical recovery.