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Composite PMI Rose in the Eurozone, Fell Sharply in the UK

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Eurozone composite PMI rose

The composite PMI (purchasing managers’ index) for the Eurozone (FEZ) (EZU), published by Markit Economics, released at 52.9 in July—compared to 53.1 in the previous month and above market expectations of a decline to 52.5. A release above the threshold level of 50 indicated expansion in the sector. A rise in the Eurozone PMI in Germany and France was offset by a decline in other smaller economies. The composite PMI for Germany (EWG) came in at 55.3 for July—compared to 54.4 in the previous month and above estimated forecasts of 53.7. The French (EWQ) composite PMI also released at 50—higher than estimated forecasts of 49.2 and 49.6 the previous month. The figures are in line with the ECB’s (European Central Bank) “wait and see” approach. The central bank isn’t expected to ease its monetary policy as it analyzes the macroeconomic data releases before making a decision on the policy front. EZU rose by 0.24% on July 22.

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UK composite PMI fell sharply

The United Kingdom’s (EWU) composite PMI released below the threshold level of 50—it was 47.7 for July. The previous figure stood at 52.4. This indicates that the Brexit vote is having a negative impact on the United Kingdom’s output and payrolls. The uncertainty arising due to the United Kingdom’s exit from the European Union is driving a cut in orders and payroll levels. EWU fell by 0.19% on July 22.

Industrial orders, retail sales drop in Italy

Among other Eurozone economies, industrial orders for Italy fell by 4.2% on an annual basis in May—compared to an 11.3% fall in the previous month. Industrial sales also fell by 2.7% on an annual basis in May—compared to a 0.1% rise in the previous month. Retail sales in Italy also exhibited a drop of 1.3% on an annual basis in May. They fell for the second consecutive month. They fell by the steepest level since November 2014.

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