Eurozone growth slowed in July, as the debt, financial, and
unemployment crises continue to cripple the continents economy.
Data released overnight showed that the European economy slowed in
July from June ever so slightly. However, peripheral nations
including Spain and Italy actually showed some signs of life.
The Eurozone Purchasing Managers Index (PMI) fell slightly in
July to 44.1 from 45.1 in June. The slowdown in the economy could
be due to seasonal issues as factories tend to shut down for summer
breaks. Some countries were responsible for the slowdown more than
others in the report. Spanish PMI unexpectedly rose in July from
41.1 in June to 42.3 in July on expectations of a 40.5 reading. The
beat in Spain shows that the Spanish economy contracted less than
expected in July and may indicate that Spain's economy may be able
to escape the debt and unemployment crises that have caused it to
Italian PMI also beat expectations in July, however the metric
fell slightly in the month. Italy's PMI fell to 44.3 from 44.6 in
June on expectations of a 44.2 reading. The smaller than expected
drop could signal that Italy's large manufacturing sector could be
rebounding. Even though Spain and Italy beat expectations, the news
was not as good for Germany and France. Germany's PMI fell to 43 in
July from 40.3 in June on expectations of a 40.3 reading and
France's PMI fell to 43.4 from 43.6 in June on expectations of a
43.6 reading. Also, the UK PMI fell as well, falling an astounding
3 index points to 45.4 from a downwardly revised 48.4 in June on
expectations of a 48.7 reading.
European equity markets seemed to shrug off the data on hopes
that central banks are going to step up and ease further at
meetings this week. English shares rose more than 1 percent on the
extremely weak PMI on what can only be hopes of further easing from
the Bank of England at its meeting Thursday. German and French
shares also rose on hopes that the European Central Bank is going
to step up its crisis fighting measures at its decision, also on
Thursday. Spanish and Italian 10-year yields also fell, on hopes
that the ECB is going to launch a plan to stabilize sovereign debt
markets in Europe.
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