German June data: Final Manufacturing PMI improves to 45.2, Jobless Rate rises to 6.4%

• Employment Rate in Germany rises to 6.4% in June vs. 6.6% expected

The German manufacturing sector contraction eases further in June, the final manufacturing activity report from IHS/Markit research showed this Wednesday.

The German Manufacturing purchasing managers index (PMI) arrived at 45.2 in June versus 44.6 expected and 44.6 previous.

Separately, the German Unemployment Rate arrived at 6.4% in June vs. 6.6% expected and 6.3% last. The Unemployment Claims rose by 69K in June vs. +120K expected and May’s +238K.

Key comments from Phil Smith, Principal Economist at IHS Markit

"We can take away positives and negatives from June's manufacturing PMI survey. On the one hand, the data show more German manufacturers starting to ramp up production, and a regaining of confidence which has been severely lacking in recent months. But on the other, demand remains very much subdued and is holding back any recovery.’

"The lack of new orders means manufacturers are relying on ever-dwindling backlogs of work to support production, and until new orders start to pick up and factories get back to somewhere near capacity, jobs across the sector are at risk.”

FX implications

The shared currency seems little impressed by the upbeat German PMI numbers, with EUR/USD trading modestly flat at 1.1230. The spot recovered from a daily low of 1.1216.