A revision to the IMF Economic Outlook for the Eurozone anticipates ongoing contraction. On Wednesday, the International Monetary Fund released its World Economic Outlook Update , which revealed that the IMF economic outlook for the Eurozone calls for continued economic contraction, possibly lasting through the third quarter of 2013 (NYSEARCA:VGK).  Although the IMF expects global economic growth to increase by 3.5 percent during 2013, the Eurozone is expected to have a bad year: The near-term outlook for the  euro area  has been revised downward, even though progress in national adjustment and a strengthened EU-wide policy response to the euro area crisis reduced tail risks and improved financial conditions for sovereigns in the periphery.  Activity is now expected to contract by 0.2 percent in 2013 instead of expanding by 0.2 percent.  The Bank of Spain released some awful news on Wednesday, validating the criticism of the nation’s austerity program (referred to in Europe as “fiscal consolidation”) as the nation’s economy contracted by another 0.6 percent during the fourth quarter of 2012 (NYSEARCA:EWP).  Despite the bloodletting by Prime Minister Mariano Rajoy, the European Commission expects that Spain will not meet its 2012 deficit reduction target.  The Bank of Spain highlighted the results of the government’s efforts: For 2012 as a whole GDP is expected to decline by 1.3%, against a financial background of high tension, fiscal consolidation, private-sector deleveraging and the ongoing reduction in employment. At the World Economic Forum’s annual meeting in Davos, Switzerland, finance ministers expressed anxiety over British Prime Minister David Cameron’s offer to conduct a referendum to determine whether Britain will continue its membership in the European Union (NYSEARCA:EWU).  Even if the referendum were to proceed, it would not take place until the end of 2017. As of 11:18 EST, the Euro STOXX 50 Index declined 0.34 percent to 2,707 – staying well above its 50-day moving average of 2,613.  After breaking above its resistance level of 2,700 on Monday, the STOXX 50 is once again struggling at that level, which has been a barrier since the beginning of the new year.  Its Relative Strength Index dipped to 62.74 (NYSEARCA:FEZ).  The FTSE 100 Index rose 0.34 percent to 6,197 (NYSEARCA:EWU).  The German DAX Index advanced 0.14 percent to 7,707 (NYSEARCA:EWG).  France’s CAC 40 Index fell 0.43 percent to 3,724 (NYSEARCA:EWQ).  Spain’s IBEX 35 Index declined 0.19 percent to 8,611 (NYSEARCA:EWP).  Italy’s FTSE MIB Index dropped 0.70 percent to 17,577 (NYSEARCA:EWI). As of 11:25 EST, the euro declined 0.25 percent against the dollar, trading at $1.3289 (NYSEARCA:FXE). Spain’s ten-year bond yield dropped to 5.06 percent on Wednesday from Tuesday’s closing level of 5.12 percent.  Spain’s two-year bond yield declined to 2.52 percent on Wednesday from Tuesday’s closing level of 2.55 percent (NYSEARCA:EWP). Italy’s ten-year bond yield declined to 4.21 percent on Wednesday from Tuesday’s closing level of 4.23 percent (NYSEARCA:EWI). On London’s ICE Futures Europe Exchange, March futures for Brent crude oil advanced by 22 cents (0.20 percent) to $112.64/bbl. (NYSEARCA:BNO, NYSEARCA:USO).   Crude Dips as IMF Cuts Global Growth Forecast February Gold futures declined by $6.50 (0.38 percent) to $1,686.70 per ounce (NYSEARCA:GLD).   Gold Facing an Important Enemy right Now? In Japan, stocks continued to sink as the yen advanced following a decision by the Bank of Japan to delay implementation of its aggressive monetary easing plan until January of 2014 (NYSEARCA:FXY).  The Nikkei 225 Stock Average took a 2.08 percent nosedive to 10,486 (NYSEARCA:EWJ). In China, stocks made solid gains in anticipation of an upbeat flash PMI which will be released on Thursday by HSBC and Markit Economics.  The manufacturing sector led the advance on Wednesday.  The Shanghai Composite rose 0.25 percent to 2,320 (NYSEARCA:FXI).  Hong Kong’s Hang Seng Index declined 0.10 percent to 23,635 (NYSEARCA:EWH). Wednesday’s American stock index futures trading was mixed as investors cautiously monitored quarterly earnings reports. The March 13 Dow Jones Industrials future declined 0.09 percent to 13,684 as of 9:13 EST.  The March 13 S&P 500 future fell 0.17 percent to 1,487 (NYSEARCA:SPY).  The March 13 Nasdaq 100 future advanced 0.15 percent to 2,755. Bottom line:  The latest World Economic Outlook Update from the IMF suggests that the Eurozone recession could continue through the third quarter of 2013, at which point the economy is expected to expand by 0.5 percent during the final quarter.  Sign up for Wall Street Sector Selector’s FREE Stock Market Timing Indicator!    Disclaimer: The content included herein is for educational and informational purposes only, and readers agree to Wall Street Sector Selector’s Disclaimer , Terms of Service , and Privacy Policy before accessing or using this or any other publication by Wall Street Sector Selector or Ridgeline Media Group, LLC.