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July 3, 2026
Euro traded at 1.1441 against USD at 9:00 AM PST
The euro area private sector stabilized in June after two months of moderate decline. The composite output index registered 50.0 in June compared to 48.5 in May. The flash score was 49.5. Stabilization reflects growth in manufacturing being offset by a further fall in services. The final services Purchasing Managers' Index (PMI) rose from 47.7 in the previous month to 49.4. Still, a score below 50.0 indicates contraction in the private sector.
Despite further reduction in demand, private sector activity stabilized in June. Companies made further inroads into their backlogs of work. Employment was virtually unchanged in June. Business confidence improved in June, taking it further above April's recent low. Growth expectations for the coming twelve months were their most optimistic since the outbreak of war in the Middle East.
Input prices increased sharply above the historical trend. That said, the rate of increase was the weakest in four months. Subsequently, output charges were raised by the smallest margin since March. Sharper expansions in Italy, Spain, and Ireland helped to lift the Eurozone economy out of its downturn.
Germany's private sector contracted in June, reflecting the weakness in the service sector as the manufacturing sector posted an increase in production. The composite output index fell from 49.5 to 48.8 in the prior month. The reading was above flash 48.0. The services PMI came in at 48.6 in June, up from 48.1 in May. This is the highest score in the current three-month sequence of contractions.
Although French private sector activity improved from May, the sector remained in the contraction territory for the sixth month straight. The composite output index posted 47.2, down from May's 28-month low of 44.9. The services PMI climbed from 44.3 in the previous month to 46.8 in June. The flash score was 47.4.
Italy's private sector expansion became broad-based in June. The composite output index registered 50.8 in June, up from 50.4 in the previous month. The services PMI ticked above the neutral threshold of 50.2 in June, up from 49.4 in May.
Spain's private sector logged a stronger growth in June, driven by the service sector as manufacturing output declined for the first time in three months. The composite output index rose from 50.2 in May to 53.3. The services PMI hit 54.2, up from 50.1 in the previous month. 07/03/2026 - 06:17:00 (RTTNews)
Italy's retail sales increased in May after remaining flat in the previous month. The sales value rose 0.2% monthly in May, following a stagnant change in April. Sales of food products expanded by 0.2% monthly in May, and those of non-food products increased by the same 0.2%. Regarding non-food items, the largest increase was recorded for household appliances, radios, televisions, and tape recorders, which grew 4.9%. 07/03/2026 - 09:06:00 (RTTNews)
British Pound traded at 1.3354 against USD at 9:00 AM PST
The UK service sector contracted at the fastest pace since early 2023 in June. The services Purchasing Managers' Index (PMI) posted 48.8 in June, down from 49.3 in May. The flash score was 48.7. The score remained below the neutral 50.0 mark and hit its lowest since the start of 2023. Service providers typically cited lackluster domestic economic conditions, ongoing geopolitical uncertainties linked to the Middle East conflict, and general risk aversion among clients.
New orders fell for the fourth month straight. Export orders also continued their downward trend since March. There was a sustained reduction in backlogs of work, reflecting a lack of pressure on business capacity. Input price inflation slowed, and output price inflation was the slowest since February. The UK private sector output shrank moderately in June, with the composite output index falling to the lowest since April 2025. The final composite output index hit 49.3, down from 49.7 in May and a flash reading of 49.4. 07/03/2026 - 08:48:00 (RTTNews)
This market update is prepared by Cathay Bank for informational purposes only and does not constitute any form of legal, tax or investment advice, nor should it be considered an assurance or guarantee of future exchange rate movements or trends. This information is provided without regard to the specific objectives, financial situations or needs of any recipient. Cathay Bank does not make any representations or warranties about the accuracy, completeness or adequacy of this market update.
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