The Euro Zone continues its successful path towards recovery with the release of upbeat data, one after another, reflecting the fast paces the economy is undertaking with wise interventions by the European Central Bank (ECB). Now, there are more hopes that the economy may recover faster than what the ECB expected in its latest announcements, referring to the economy possibly recovering by the second half of next year.
Euro Zone released its PMI manufacturing for the month of August's advanced reading coming in at 47.9; the most since 14 months, higher than both prior and previous readings of 46.3 and 47.5 respectively. PMI services for the same month rose to its highest in a year and a half to 49.5 from 45.7, which beat market expectations of 46.5. PMI composites reached the 50.0 barrier; the best record since more than a year, from the prior contraction of 47.0, while it was forecasted to come in at 48.0.
The incline was led by Germany, where PMI Manufacturing came in at 49.0, better than the previous of 45.7 and median projections of 47.0; while, the PMI Services showed expansion to 54.1 from the prior 48.1 and the estimated 48.6.
Also, PMI Manufacturing in France; the second largest economy in the euro area, grew to 50.2, the highest in a year and a half, compared with the advanced of 48.1 and the anticipated of 49.0; whereas, PMI Services climbed to 48.9, the highest level since September 2008, from the advanced reading of 45.5 and the forecasted reading of 46.3.
The European economy is continuing its ongoing improvement in the third quarter, after the optimistic data released in the second quarter. GDP for the second quarter showed an ease in contraction to 0.1% from 2.5% contraction; the lowest since 1995, during the first quarter. If the economy continued in this pace, we expect to see growth starting from the third quarter, especially with the ongoing efforts by the ECB and national governments to shore up the economy.
The ECB slashed the benchmark interest rate to a record low of 1%, to boost the economy amid the undergoing economic downturn. Also, the bank started purchasing bonds worth 60 billion euros, with newly printed money since July 6, to support markets with liquidity, thereby reviving lending and spending. The strong monetary weapons used by the bank, along with the influential government assistance, gave an impetus to the economy and succeeded in moderating the pace of contraction across all sectors of the economy.
Despite the improvement witnessed in the data, the softening labor market conditions may cushion the growth pace. The unemployment in June inclined to 9.4%, which means that many companies are still terminating employees to cut expenses down to regain profits.
After the news; the euro climbed against the U.S. dollar boosted by the positive figures. Currently, the euro is traded at 1.4297 recording a high of 1.4307 and a low of 1.4208.
Moreover, European stocks surged at the early trading at 4:55 EST; led by DJ Euro STOXX 50, which gained 15.02 points or 0.58% to 2679.01 points; DAX recorded 5347.56 points inclining by 0.69% or 36.73 points; CAC 40 added 19.67 points or 0.57% to 3525.38 points; and FTSE 100 index increased 23.43 points or 0.49% to 4780.01 points.
Euro Zone released its PMI manufacturing for the month of August's advanced reading coming in at 47.9; the most since 14 months, higher than both prior and previous readings of 46.3 and 47.5 respectively. PMI services for the same month rose to its highest in a year and a half to 49.5 from 45.7, which beat market expectations of 46.5. PMI composites reached the 50.0 barrier; the best record since more than a year, from the prior contraction of 47.0, while it was forecasted to come in at 48.0.
The incline was led by Germany, where PMI Manufacturing came in at 49.0, better than the previous of 45.7 and median projections of 47.0; while, the PMI Services showed expansion to 54.1 from the prior 48.1 and the estimated 48.6.
Also, PMI Manufacturing in France; the second largest economy in the euro area, grew to 50.2, the highest in a year and a half, compared with the advanced of 48.1 and the anticipated of 49.0; whereas, PMI Services climbed to 48.9, the highest level since September 2008, from the advanced reading of 45.5 and the forecasted reading of 46.3.
The European economy is continuing its ongoing improvement in the third quarter, after the optimistic data released in the second quarter. GDP for the second quarter showed an ease in contraction to 0.1% from 2.5% contraction; the lowest since 1995, during the first quarter. If the economy continued in this pace, we expect to see growth starting from the third quarter, especially with the ongoing efforts by the ECB and national governments to shore up the economy.
The ECB slashed the benchmark interest rate to a record low of 1%, to boost the economy amid the undergoing economic downturn. Also, the bank started purchasing bonds worth 60 billion euros, with newly printed money since July 6, to support markets with liquidity, thereby reviving lending and spending. The strong monetary weapons used by the bank, along with the influential government assistance, gave an impetus to the economy and succeeded in moderating the pace of contraction across all sectors of the economy.
Despite the improvement witnessed in the data, the softening labor market conditions may cushion the growth pace. The unemployment in June inclined to 9.4%, which means that many companies are still terminating employees to cut expenses down to regain profits.
After the news; the euro climbed against the U.S. dollar boosted by the positive figures. Currently, the euro is traded at 1.4297 recording a high of 1.4307 and a low of 1.4208.
Moreover, European stocks surged at the early trading at 4:55 EST; led by DJ Euro STOXX 50, which gained 15.02 points or 0.58% to 2679.01 points; DAX recorded 5347.56 points inclining by 0.69% or 36.73 points; CAC 40 added 19.67 points or 0.57% to 3525.38 points; and FTSE 100 index increased 23.43 points or 0.49% to 4780.01 points.
