- European session review: EUR strengthens on better-than-expected eurozone PMIs and improved risk appetite
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European session review: EUR strengthens on better-than-expected eurozone PMIs and improved risk appetite
| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|---|---|---|---|---|---|
| 07:15 | France | Services PMI | June | 31.1 | 44.2 | 50.3 |
| 07:15 | France | Manufacturing PMI | June | 40.6 | 46 | 52.1 |
| 07:30 | Germany | Services PMI | June | 32.6 | 42 | 45.8 |
| 07:30 | Germany | Manufacturing PMI | June | 36.6 | 41.5 | 44.6 |
| 08:00 | Eurozone | Manufacturing PMI | June | 39.4 | 44.5 | 46.9 |
| 08:00 | Eurozone | Services PMI | June | 30.5 | 41 | 47.3 |
| 08:30 | United Kingdom | Purchasing Manager Index Manufacturing | June | 40.7 | 45 | 50.1 |
| 08:30 | United Kingdom | Purchasing Manager Index Services | June | 29.0 | 40 | 47 |
EUR rose against most other major currencies in the European session on Tuesday, helped by better-than-expected PMI readings and improvement in broader market sentiment.
Investors' risk appetite recovered after the White House trade adviser Peter Navarro stated that his earlier remarks that the trade deal with China was “over” were taken "wildly out of context." Meanwhile, the U.S. President Donald Trump reaffirmed that the U.S. trade deal with China was "fully intact". "Hopefully they will continue to live up to the terms of the agreement," said on Twitter. This reduced volatility in markets as well.
The flash data from IHS Markit revealed that Germany's private sector showed further signs of a turnaround following a record downturn in activity earlier in the second quarter. The Flash Germany Composite Output Index jumped to 45.8 in June from 32.3 in the previous month. This was the highest reading in four months and above economists' forecast of 44.2. The survey highlighted the effects of easing lockdown restrictions and also indicated an improvement in business confidence.
Meanwhile, France's private sector activity rose for the first time in four months during June as restrictions related to dealing with the COVID-19 pandemic continued to be lifted. Flash France Composite Output Index increased to 51.3 this month from 32.1 in May. That was above economists' estimate of 46.3.
Overall, the eurozone economic downturn eased markedly for a second successive month in June as lockdowns to prevent the spread of the COVID-19 outbreak were further
relaxed. The flash IHS Markit Eurozone Composite PMI rose to 47.5 in June from 31.9 in May. This was the highest reading in four months and exceeded economists' forecast of 42.4.
Investors also continued to expect the European leaders to reach compromise or agreement on the recovery fund. A spokesperson for the European Union's (EU) Brussels headquarters, Barend Leyts, announced earlier today that the EU heads would meet in Brussels on July 17-18 to discuss the EU recovery plan and long-term budget.
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