Euro zone flash services PMI grew unexpectedly in June; Canadian retail sales and CPI worse than expected
On Friday the readings from the Euros zone portrayed a picture of better state of the overall economy, with a decent performance in the 2nd quarter, where the private sector business growth was better than expected in June. The two biggest economies of the euro zone, Germany and France shod a faster overall expansion in June, while the HIS Markit euro zone flash PMI rose this month to 54.8 from 54.1 in May, well above the predicted 53.9. According to Reuters, analysts see this as a step in the right direction and that the calendar effects may have overstated the slowdown in May, and optimism has increased among services firms, increasing hiring at the fastest pace in over a decade. The employment index climbed to 55.2 from 53.9, which is the highest since 2007.
The manufacturing PMI of euro zone fell from 55.5 last month to 55.0, which is in line with the forecast, and according to HIS Markit chief economist, Chris Williamson, the improved service sector performance has helped to offset the increasing drag from the manufacturing sector in June. In addition, he has also warned of the possibility that the manufacturing sector would be exposed to more slowdown in the coming months due to the political uncertainty and fear of trade war that is influencing the companies’ sentiment.
Important macro-economic data was released from Canada, with the retail sales falling to -1.2% from the May rise of 0.8%. Core retail sales came at -0.1%, while the forecast was 0.5%, and CPI came as well lower than expected at 0.1%, as opposed to the forecasted 0.4%. In addition, the inflation rate for Canada remained unchanged at 2.2 percent in May, fourth month in a row exceeding the BoC 2.0% target and market operators see 60% chance of another hike when the Bank of Canada releases its next decision on 11th of July. Since last July, BoC has raised interest rates 3 times as the economy strengthened.
ECONOMIC CALENDAR EVENTS FOR JUNE 25th
EUR German Ifo Business Climate
USD New Home Sales