Global Macro: Europe's on the Upswing

NEW YORK (TheStreet) -- iShares Europe 350 Index (IEV), an exchange-traded fund, rose on Monday as German business morale improved in February and as Moody's upgraded Spanish debt.

The improved sentiment -- if substantiated by hard positive economic data -- may lead to higher European equities in coming weeks.

A reading of German business morale for February reached its highest level since July 2011, suggesting the European Union could grow faster in the first quarter after modest growth last year.

The survey data, released Monday, show that the economic recovery has picked up momentum the past few months, which has been great for financial markets. Still, hard economic data have yet to find solid footing. Exports, industrial output and durable goods orders all fell in December, leading some economists to warn that the economy may be diverging from the survey's findings.

Germany was scheduled to release its fourth-quarter growth figure on Tuesday, which will give more insight into whether business morale is too optimistic.

Meanwhile, Spain received an upgrade on its sovereign debt by the Moody's rating agency on Friday. Moody's praised the country for its ability to restructure its labor market while battling a 25% unemployment rate and for narrowing its deficit.

The country's rating was cut by Standard & Poor's in January 2009, and by Fitch Ratings and Moody's in 2010.

During that time, the country was heavily invested in residential real estate, riding the credit boom higher until the market crashed, which gave way to a more export-driven model.

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