- HSBC chief China economist Hongbin Qu
A bunch of mixed economic data from the Eurozone was released on Wednesday, raising concerns that the economy is not on the path of recovery yet, and additional stimulus measures may be needed. According to data from Markit Economics, service sector PMI registered a better performance for the Eurozone as a whole, while Italy's activity disappointed and contracted, whereas activity in German service sector returned to growth. Services activity in the 17-nation economy as a whole showed a slight improvement reaching 48.3 in June, up from 47.2 recorded in the preceding month, while the PMI Composite stood at 48.7. Analysts, however, expected a reading of 48.6 for the services PMI and 48.9 for the PMI Composite. Despite the improvement, indicator is still pointing at the contraction of the sector. Service sector of the Eurozone's powerhouse Germany returned to growth and rose to 50.4 last month, after falling to 49.7 in the prior month.
Also Wednesday, the EU's statistical office Eurostat unveiled data on the Eurozone retail sales, which showed a 1% monthly gain, beating expectations for a 0.3% growth and recovering from previous month's 0.2% drop. On a yearly basis sales ticked down 0.1% in May, after recording a revised 1.0% contraction in the previous month. Nevertheless, the recent data suggest that the longest-ever recession had eased by the end of June.
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