As far as the Euro Area economy is concerned, the glass is half full. And that’s not just because we finally have some Euro Area wide coordinated fiscal stimulus – the Merkel-Macron plan. Oh, and while so-called ‘big data’ is nice, nothing beats good old-fashioned business sentiment surveys. We’re thinking of the European Economic Sentiment Index (ESI) in particular. That index is published in a timely fashion, isn’t too noisy and has data series that spans decades. Yesterday morning the survey for May was released. Below we use a regression using the ESI to estimate monthly GDP growth rates. Here’s the chart for the five biggest economies of the Euro Area:

For the full report, click here