The Eurozone's services sector returned to growth in July, Germany led the recovery, and inflation pressures eased to a five-month low. Renewed Middle East conflict threatens the outlook, keeping ECB policy uncertain.
Alpha Score of 52 reflects moderate overall profile with weak momentum, moderate value, moderate quality, moderate sentiment.
The Eurozone economy expanded at its fastest pace in eight months in July. The S&P Global Composite PMI rose to 52.0 from 50.0 in June, with the services sector returning to growth. The Services PMI climbed to 51.7 from 49.4, its highest level in five months, S&P Global said.
Germany led the recovery. Its Composite PMI returned to expansion at 51.3 after three months of contraction, supported by a near-stabilization in services activity. France remained the laggard, though conditions improved closer to the 50 threshold. The divergence between the two largest economies narrowed.
Input cost inflation slowed to its weakest pace since February. Business optimism hit a five-month high. S&P Global said the survey is consistent with about 0.3% quarterly GDP growth.
The improvement followed a temporary easing in oil prices and geopolitical tensions in June. Since then, the Middle East conflict has intensified. S&P Global said the renewed uncertainty has resurfaced risks to both growth and inflation.
The ECB's next policy meeting is in September. Policymakers will have more data by then, including the August flash PMI.
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