The Eurozone's final July services PMI was 51.7, and the final composite PMI was 52.0, both slightly higher than expected and the previous reading. The composite PMI continued to hold above 50, indicating that the Eurozone's third quarter did not show a significant slowdown. The preliminary July reading already showed the Eurozone composite PMI rising from 50.0 in June to 51.9, with the final reading revised upwards to 52.0, reinforcing the signal of "moderate economic expansion again."
This contrasts with France's services PMI, which is below 50. While France remains on the verge of contraction, the Eurozone's overall services and composite PMIs are in expansion territory, suggesting that the European recovery is not entirely balanced, but rather that improvements in Germany, manufacturing, and some service sectors are offsetting France's weakness. Previously, the Eurozone's July manufacturing PMI also rose to 51.9, and the manufacturing output index rose to 52.9, the highest since March 2022, indicating that this improvement is not solely driven by service consumption, but also supported by a recovery in the industrial sector. For the market, this may weaken the logic of "a rapid weakening of the European economy and the ECB's need to quickly turn dovish."
