Peter Praet, executive board member and chief economist of the European Central Bank. Image via ECB.
Summary:
Eurozone recovery continues to expand
Flash PMI’s for May in the eurozone stable as regional PMI’s advance
Germany continues to spearhead growth with Ifo business climate advancing
German GDP growth seen rising 0.6% on a quarterly basis
ECB officials reiterate no change to policy while acknowledging a pickup in growth
The eurozone’s purchase manager’s index released last week continued to signal growth momentum in the region, consistent with ECB’s Mario Draghi calling the assessment as “solid and broad.“
The eurozone composite flash PMI, released by Markit, was stable at 56.8 in May.
The preliminary data showed that growth in the Eurozone’s two of the largest economies continued to advance with the manufacturing sector posting the biggest gains.
The markets are currently looking at any evidence from the ECB officials to tone back their dovish rhetoric, although there have been subtle signals from the central bank which as acknowledged the pick-up in the recovery of the region.
Germany spearheads Eurozone growth
The positive string of data was not just limited to the flash PMI’s but also better than expected numbers from the German Ifo business climate data as well as the quarterly GDP numbers.
Business sentiment, as measured by the Ifo Institute showed another month of expansion. The Ifo business climate index rose to 114.6 in May, up from 113.0 in April. The index was already at record highs since record keeping started in 1991.
The Ifo president, Fuest said that the economic activity in Germany continued to remain brisk with manufacturers planning to ramp up production.
Read more: https://www.orbex.com/blog/2017/05/eurozone-flash-pmi-business-confidence-firms-may/