Eurozone flash Manufacturing PMI rises surprisingly faster-than-estimates to 52.0

Sagar Dua FXStreet

Preliminary HCOB Manufacturing Purchasing Managers’ Index (PMI) in the oldest continent expands at a faster pace to 52.0 in July from June’s figure of 51.4. The manufacturing activity was anticipated to expand but at a moderate pace to 51.3.

The Composite PMI in the Eurozone arrives at 51.9, higher than 50.3 estimate and the previous reading of 50.0. The Services PMI has surprisingly expanded, returning above 50.0, at 51.6.

“July is seeing a welcome revival of economic activity in the eurozone, but a volatile geopolitical environment means it remains to be seen if the good news can last," Chris Williamson, Chief Business Economist at S&P Global Market Intelligence said.

Market reaction

No major reaction is seen in the Euro (EUR) following the Eurozone PMI data release. However, the major currency pair reacted negatively to the German PMI data, despite figures being upbeat. At press time, EUR/USD trades 0.1% higher at around 1.1385

Economic Indicator

HCOB Manufacturing PMI

The Manufacturing Purchasing Managers Index (PMI), released on a monthly basis by S&P Global and Hamburg Commercial Bank (HCOB), is a leading indicator gauging business activity in the Eurozone manufacturing sector. The data is derived from surveys of senior executives at private-sector companies from the manufacturing sector. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the manufacturing economy is generally expanding, a bullish sign for the Euro (EUR). Meanwhile, a reading below 50 signals that activity among goods producers is generally declining, which is seen as bearish for EUR.

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