25 Jul 2014
Positive prospects for H2 in Euroland – Danske Bank
FXStreet (Edinburgh) - Senior Analyst Pernille Nielsen at Danske Bank assesses the recent PMI releases in the euro area.
Key Quotes
“Euro services PMI was stronger than expected in July and increased to 54.4, from 52.8 in June. This is the highest level in more than three years and as services are driven mainly by domestic demand, it signals that euro demand continued to strengthen in H2”.
“The increase in the services PMI came even though consumer confidence declined for the second month in a row in July. Although the latter has declined a little, it is still at a very high level (above the peak in 2010-11) and it continues to suggest upside risk to our forecast for private consumption in the euro area”.
“Manufacturing PMI continued to be weaker than the service component and it was almost unchanged at 51.9 in July compared with 51.8 in June. Nevertheless, the underlying components give encouraging signs of a higher index going forward”.
“The combination of solid domestic demand and strengthening global growth implies that economic activity in Europe should strengthen further in H2, when we expect a quarterly growth rate around 0.5%”.
Key Quotes
“Euro services PMI was stronger than expected in July and increased to 54.4, from 52.8 in June. This is the highest level in more than three years and as services are driven mainly by domestic demand, it signals that euro demand continued to strengthen in H2”.
“The increase in the services PMI came even though consumer confidence declined for the second month in a row in July. Although the latter has declined a little, it is still at a very high level (above the peak in 2010-11) and it continues to suggest upside risk to our forecast for private consumption in the euro area”.
“Manufacturing PMI continued to be weaker than the service component and it was almost unchanged at 51.9 in July compared with 51.8 in June. Nevertheless, the underlying components give encouraging signs of a higher index going forward”.
“The combination of solid domestic demand and strengthening global growth implies that economic activity in Europe should strengthen further in H2, when we expect a quarterly growth rate around 0.5%”.