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The rampant optimism in the U.S. has not been a localized event.  Even the bruised and battered Eurozone has caught recovery fever.  The recovery discussion has blossomed out of this easing in the pace of contraction.  As I’ve previously said, economic activity fell off a cliff in Q4 and simply couldn’t have sustained that downward pace.  What we’re seeing now is some recovery off these very depressed levels, but nowhere near real recovery.   This is most evident in Eurozone PMIs, which you can find below.  The charts are a clear example of just how steep the decline was in Q4.  The slight uptick we’re seeing only brings us back to the extremely depressed levels of January.  Reasons for optimism?  I don’t think so.

eurozonepmiClick for larger image

*Source: Markit Economics