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Eurozone flash PMI rebound lifts hopes for ECB rate path
The July flash composite PMI rose to 51.9, with input cost inflation slowing to the lowest since February.
Forexlive reports that euro area business activity expanded further in July, led by a rebound in both services and manufacturing, as flash PMIs improved across the region to start Q3 on a stronger footing.
July flash services PMI rose to 51.6, hitting a 5-month high, while manufacturing PMI increased to 52.0, a 3-month high. The manufacturing output index also reached a 52-month high, supported by a renewed increase in new orders, the first gain in five months.
On the labor and prices front, Forexlive says the data showed the first increase in employment in 2026 so far, though job creation remained only marginal. Input cost inflation slowed in July to the lowest since February, even as input prices continued to rise sharply.
The outlet adds that the improving readings were framed as potentially easing pressure on the ECB by moderating selling price inflation expectations, but with the Middle East conflict again adding volatility and raising the question of whether the gains can last.