Germany’s flash Manufacturing PMI unexpectedly rises strongly to 52.2 vs. 50.1 estimates

German flash HCOB Composite PMI returns to the expansion trajectory in July after declining in June. Preliminary figures show that the overall business activity expanded to 51.2. The Composite PMI was seen arriving at 49.8 from 49.5 in June. A figure below 50.0 is considered a contraction in overall business activity. The Composite PMI increased significantly due to upbeat factory sector activity.

The Manufacturing PMI rises at a stronger-than-expected pace to 52.2 from 50.3 in June, beating 50.1 estimates. The Services PMI contracts again but at a moderate pace to 49.6. The data was seen marginally higher at 48.8 from the previous reading of 48.6.

"The German economy made a positive start to the third quarter, with the Composite PMI returning to growth territory after having signalled a three-month spell of contraction following the outbreak of war in the Middle East. However, given the escalating hostilities in the region in the past week or so, which have put renewed upward pressure on global energy prices, the path to a sustainable recovery still seems very much uncertain," Phil Smith, Economics Associate Director at S&P Global Market Intelligence said.

Market reaction

The initial reaction by the Euro (EUR) appears to be negative after the data release. EUR/USD retreats from its intraday high of around 1.1400