- Jack Allen, an economist at Capital Economics
A slew of softer economic data came out in the Euro zone, including a slowdown in business activity in the services sector across the region's member states, and sharp decline in retail sales. The Euro zone's services sector continued to expand in July in the face of the Greek debt crisis. According to Markit, the region's services PMI rose to 54.0 in the reported month, up from 53.8 the preliminary report showed and compared with 54.4 in June. German services PMI climbed to 53.8, whereas in France, the Euro zone's second biggest economy, the reading came in at 52.0 in June. In addition to that, the Euro area's composite PMI, a measure of business activity in the manufacturing and services sectors, slid slightly to 53.9 in July, down from 54.2 registered in the previous month. The flash composite PMI stood at 53.7.
A separate report showed, retail sales in the 19-nation region dropped more sharply than predicted in June. The official data showed retail sales in the Euro bloc declined 0.6% in June from a month earlier, whereas economists had expected the gauge to decline 0.2%. However, when measured on an annual basis, retail sales rose 1.2% in the reported month, down from a revised 2.6% advance seen previously. Retail turnover in Germany, the Euro zone's star economy, dropped 2.3% on month in June.
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