Latest news with #HamburgCommercialBank
Yahoo
6 days ago
- Business
- Yahoo
Eurozone growth surprises in July: Is the worst really over?
Economic activity in the eurozone rose more than expected in July, signalling a stronger start to the third quarter and easing concerns that trade tensions would drag on the region's recovery. The Flash Composite Purchasing Managers' Index (PMI) – a closely watched gauge of business conditions – rose from 50.6 to 51.0 in July, hitting its highest level since August 2024 and topping market expectations of 50.8. Much of the rebound came from the services sector, which continues to lead the bloc's recovery. The services PMI rose to 51.2 from 50.5, beating expectations of 50.7 and marking the fastest expansion since January. Manufacturing, while still contracting, showed signs of stabilisation. The manufacturing PMI rose to 49.8 from 49.5, the most optimistic print in three years, edging closer to the neutral 50 threshold. Although factory new orders declined again, the pace slowed and overall production neared equilibrium. Businesses responded to stronger activity and steadier order books by hiring more staff. At the same time, cost pressures eased. The pace of inflation dropped to a nine-month low and remained below the historical average. Economists note steady progress and fading inflation risks Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank (HCOB), struck a cautiously upbeat tone. 'The eurozone economy appears to be gradually regaining momentum. The recession in the manufacturing sector is coming to an end, and growth in the services sector accelerated slightly in July,' he said. He added that Hamburg Commercial Bank's GDP Nowcast, which incorporates PMI data, points to 'robust economic growth' in the third quarter. For the European Central Bank, signs of slowing inflation in services are likely to be welcomed, even if headline pressures persist. 'There is good news for the ECB, as the disinflation trend has continued in the closely watched service sector,' de la Rubia said. He noted that the stronger euro and US tariffs are likely to exert further downward pressure on prices in the coming months. Related 'Best year ever': UniCredit delivers record earnings, raises 2025 outlook EU member states adopt retaliatory hit list in response to US tariffs Germany edges forward, France lags behind Regional data continued to reveal diverging trends. Germany recorded a slight increase in output for the second month running, fuelling hopes of a broader recovery. 'We see increasing signs of a recovery in the manufacturing sector,' said de la Rubia, citing supportive policy measures such as more favourable depreciation rules introduced by Berlin on 1 July. In France, activity contracted once again, though at the slowest pace in the current 11-month downturn. 'The latest HCOB Flash PMIs from France are neither fish nor fowl,' said Jonas Feldhusen, Junior Economist at Hamburg Commercial Bank. 'While momentum has been trending upward since the beginning of the year, the index remains below the critical 50-point threshold.' Eurozone equities rally amid looming US-EU trade deal Hopes for a looming US-EU trade deal, which could lock in a 15% tariff on European exports to the US, lifted investor sentiment on Thursday, fuelling a rally in European equities as markets looked past fears of harsher trade barriers. The STOXX 50 rose nearly 1%, while the broader STOXX 600 gained 0.7%, reflecting renewed confidence across the region. Among standout performers, Deutsche Bank surged over 6% after reporting a better-than-expected second-quarter profit, reversing last year's loss. BNP Paribas also positively surprised, rising 3% after beating forecasts on both revenue and earnings. Meanwhile, LVMH Moët Hennessy Louis Vuitton slipped almost 2%, with investors bracing for a potential decline in quarterly sales as headwinds continue to weigh on the luxury sector. In currency markets, the euro held steady at 1.1765 against the dollar, as all eyes turned to the European Central Bank. The ECB is widely expected to keep its deposit rate unchanged at 2.00% when it announces its latest policy decision later in the day.
Euractiv
6 days ago
- Business
- Euractiv
Eurozone growth hits one-year high despite Trump's tariffs
Economic activity across the eurozone grew to the highest levels in almost a year this month, a business survey found on Thursday, amid signs that Germany's long-suffering industries could be recovering despite Donald Trump's punishing tariffs. The eurozone's provisional composite Purchasing Managers' Index (PMI), which measures overall activity in manufacturing and services across the single currency area, rose from 50.6 to 51.0 between June and July – an eleven-month high that pushed the index further above the 50-point mark separating growth from contraction. Germany, the bloc's largest economy, continued to expand, although its rate of growth slowed slightly from 50.4 to 50.3. Activity in France, the eurozone's second-biggest economy, also rose to an eleven-month high, but remained in contraction territory at 49.6. 'The eurozone economy appears to be gradually regaining momentum,' said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank (HCOB), which compiles the index together with S&P Global. 'Germany is playing a key role here and, together with other countries, has been able to more than offset the weakness in France,' he added, noting that 'French industry must also regain its footing' for the bloc's manufacturers to 'return to solid growth in the long term'. De la Rubia also noted that 'even higher US tariffs should not fundamentally change' the recovery in German manufacturing, which has been boosted by government pledges to increase investments in infrastructure and defence by up to €1 trillion over the next decade. Trump's tariffs on steel, aluminium, and cars have inflicted severe pain on German manufacturers – especially its export-dependent auto sector, which is already reeling from weak demand and fierce competition from Chinese electric vehicle makers. The US is Germany's top car export destination, with 450,000 vehicles valued at roughly €21 billion sent across the Atlantic in 2024, according to the US commerce department. Uncertainty in France, meanwhile, has been compounded by Prime Minister François Bayrou's controversial draft budget proposal, which was presented to lawmakers last week and aims to cut €44 billion in net government expenditure in 2026. Jonas Feldhusen, junior economist at HCOB, said France's economy is likely to struggle regardless of whether Bayrou's proposal is eventually approved by the country's deeply divided parliament. 'Should an agreement on the austerity package be reached, it would reduce disposable income for many households – posing clear downside risks for domestic demand and especially for the services sector,' Feldhusen said. 'Conversely, failure to reach a budget deal could further escalate political uncertainty.' (mm)
Euronews
6 days ago
- Business
- Euronews
Eurozone growth surprises in July: Is the worst really over?
Economic activity in the eurozone rose more than expected in July, signalling a stronger start to the third quarter and easing concerns that trade tensions would drag on the region's recovery. The Flash Composite Purchasing Managers' Index (PMI) – a closely watched gauge of business conditions – rose from 50.6 to 51.0 in July, hitting its highest level since August 2024 and topping market expectations of 50.8. Much of the rebound came from the services sector, which continues to lead the bloc's recovery. The services PMI rose to 51.2 from 50.5, beating expectations of 50.7 and marking the fastest expansion since January. Manufacturing, while still contracting, showed signs of stabilisation. The manufacturing PMI rose to 49.8 from 49.5, the most optimistic print in three years, edging closer to the neutral 50 threshold. Although factory new orders declined again, the pace slowed and overall production neared equilibrium. Businesses responded to stronger activity and steadier order books by hiring more staff. At the same time, cost pressures eased. The pace of inflation dropped to a nine-month low and remained below the historical average. Economists note steady progress and fading inflation risks Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank (HCOB), struck a cautiously upbeat tone. 'The eurozone economy appears to be gradually regaining momentum. The recession in the manufacturing sector is coming to an end, and growth in the services sector accelerated slightly in July,' he said. He added that Hamburg Commercial Bank's GDP Nowcast, which incorporates PMI data, points to 'robust economic growth' in the third quarter. For the European Central Bank, signs of slowing inflation in services are likely to be welcomed, even if headline pressures persist. 'There is good news for the ECB, as the disinflation trend has continued in the closely watched service sector,' de la Rubia said. He noted that the stronger euro and US tariffs are likely to exert further downward pressure on prices in the coming months. Germany edges forward, France lags behind Regional data continued to reveal diverging trends. Germany recorded a slight increase in output for the second month running, fuelling hopes of a broader recovery. 'We see increasing signs of a recovery in the manufacturing sector,' said de la Rubia, citing supportive policy measures such as more favourable depreciation rules introduced by Berlin on 1 July. In France, activity contracted once again, though at the slowest pace in the current 11-month downturn. 'The latest HCOB Flash PMIs from France are neither fish nor fowl,' said Jonas Feldhusen, Junior Economist at Hamburg Commercial Bank. 'While momentum has been trending upward since the beginning of the year, the index remains below the critical 50-point threshold.' Eurozone equities rally amid looming US-EU trade deal Hopes for a looming US-EU trade deal, which could lock in a 15% tariff on European exports to the US, lifted investor sentiment on Thursday, fuelling a rally in European equities as markets looked past fears of harsher trade barriers. The STOXX 50 rose nearly 1%, while the broader STOXX 600 gained 0.7%, reflecting renewed confidence across the region. Among standout performers, Deutsche Bank surged over 6% after reporting a better-than-expected second-quarter profit, reversing last year's loss. BNP Paribas also positively surprised, rising 3% after beating forecasts on both revenue and earnings. Meanwhile, LVMH Moët Hennessy Louis Vuitton slipped almost 2%, with investors bracing for a potential decline in quarterly sales as headwinds continue to weigh on the luxury sector. In currency markets, the euro held steady at 1.1765 against the dollar, as all eyes turned to the European Central Bank. The ECB is widely expected to keep its deposit rate unchanged at 2.00% when it announces its latest policy decision later in the day.
Business Times
6 days ago
- Business
- Business Times
Eurozone business activity growth hits 11-month high in July
[BRUSSELS] Business activity in the eurozone increased for a seventh consecutive month in July, with the pace of expansion hitting an 11-month high, a closely watched survey showed on Thursday (Jul 24). The HCOB Flash Eurozone purchasing managers' index (PMI) published by S&P Global registered a figure of 51.0 this month up from 50.6 in June. Any reading above 50 indicates growth, while a figure below 50 shows contraction. Although still modest, the pace of growth quickened for the second consecutive month and was the sharpest since August last year, the survey said. 'The eurozone economy appears to be gradually regaining momentum,' said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank. 'The recession in the manufacturing sector is coming to an end, and growth in the services sector accelerated slightly in July.' BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The overall increase in output reflected growth across both manufacturing and services, with the latter posting the stronger pace of growth in four months, the report said. Germany, a key driver of Europe's economy, showed encouraging signs of recovery, recording a marginal increase in output for the second month running. Business activity in France instead decreased again but at the slowest pace in almost a year. 'Manufacturing output has expanded cautiously for five months in a row. Germany is playing a key role here and, together with other countries, has been able to more than offset the weakness in France,' said de la Rubia. 'However, for the manufacturing sector in the eurozone to return to solid growth in the long term, French industry must also regain its footing.' AFP
Yahoo
6 days ago
- Business
- Yahoo
Euro zone business activity growth hits 11-month high in July, PMI shows
LONDON (Reuters) -Euro zone business activity accelerated faster than forecast this month, supported by a solid improvement in the bloc's dominant services industry and with manufacturing showing further signs of recovery, a survey showed on Thursday. HCOB's preliminary composite euro zone Purchasing Managers' Index, compiled by S&P Global and seen as a good guide to growth, rose to an 11-month high of 51.0 points from 50.6 in June. That was above the 50.0 mark separating growth from contraction and above expectations for 50.8 in a Reuters poll. "The euro zone economy appears to be gradually regaining momentum. The recession in the manufacturing sector is coming to an end, and growth in the services sector accelerated slightly in July," said Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank. For the first time in over a year, overall demand did not decline, though there was no expansion. The composite new business index came in bang on 50, its highest level since May 2024. The services PMI rose to 51.2 from 50.5, exceeding the Reuters poll forecast for a more modest lift to 50.7. Inflationary pressures eased with the services input and output prices indexes falling. The input prices index fell to a nine-month low of 56.7 from 58.1. Inflation was at 2.0% in June, official data showed earlier this month, right where the European Central Bank wants it. The ECB will hold policy steady later on Thursday, according to all 84 economists surveyed in a Reuters poll, while a small majority expect one more interest rate cut - most likely in September. A manufacturing PMI, which has been sub-50 for three years, climbed to 49.8 from June's 49.5, just ahead of the poll estimate for 49.7, while an index measuring output dipped slightly to 50.7 from 50.8. Although some of that activity was driven by completing past orders, factories did so at the slowest rate in around three years. The backlogs of work index rose to 49.0 from 47.1. Sign in to access your portfolio
