Businesses in the euro zone end the year on a high note, with PMI surveys showing solid growth. As David Pollard reports, Japan's manufacturing also grew - at its fastest pace in almost a year.
(SOUNDBITE) (English) FEDERAL RESERVE SYSTEM BOARD OF GOVERNORS CHAIRMAN, JANET YELLEN, SAYING: "My judgment is that we're in a good path to reaching our objectives. But, of course, the outlook is uncertain." Better times ahead for the US merit gradual rate hikes, says Yellen. But with a caveat from the Fed chief - the outlook still 'uncertain' - not least of all with the prospect of a new presidency. Europe too is apparently enjoying a rebound in a so-far reluctant recovery.... Its latest PMI reading the highest this year. That too could carry a warning. (SOUNDBITE) (English) CHIEF INVESTMENT OFFICER, CCLA INVESTMENT MANAGEMENT, JAMES BEVAN, SAYING: "This is simply a culmination of a blow-off in inventories, a hike in optimism that the worst in the global recession is behind us, though I don't believe that we should expect global growth of much more than three percentage points in 2017." The composite euro zone reading was in line with forecasts. France astonished even the highest expectations with its best manufacturing reading in five years. If even there there's a cautious response. (SOUNDBITE) (English) CHIEF INVESTMENT OFFICER, CCLA INVESTMENT MANAGEMENT, JAMES BEVAN, SAYING: "The French situation has deteriorated badly, and what we are seeing some bounces from the lows, but not the basis for a material hike from here." On the plus side, Japan put in its best factory performance for 11 months. And across the euro zone, new orders are up strongly. And the output price index is healthier than it's been in half a decade. That's good news for the ECB ... Even if the warning its chief made at last week's policy meeting - of 'downside risks' - means he too doesn't rule out bad news ahead.