Eurozone Preliminary Manufacturing PMI misses estimates with 52.0 in June

• Eurozone Manufacturing PMI arrives at 52.0 in June vs. 53.9 expected.
• Bloc’s Services PMI falls to 52.8 in June vs. 55.5 expected.
• EUR/USD keeps the red near 1.0500 on the downbeat Eurozone PMIs.

The Eurozone manufacturing sector's pace of expansion disappointed once again in June, the latest manufacturing activity survey from S&P Global research showed on Thursday.

The Eurozone Manufacturing purchasing managers index (PMI) arrived at 52.0 in June vs. 53.9 expectations and 54.6 last. The index hit a two-year low.

The bloc’s Services PMI dropped sharply to 52.8 in June vs. 55.5 expected and 56.1 prior. The indicator reached five-month lows.

The S&P Global Eurozone PMI Composite slumped to 51.9 in June vs. 54.0 estimated and 54.8 previous. The gauge booked the lowest level in 16 months.

Comments from Chris Williamson, Chief Business Economist at S&P Global

“Eurozone economic growth is showing signs of faltering as the tailwind of pent-up demand from the pandemic is already fading, having been offset by the cost-of-living shock and slumping business and consumer confidence.”

“Excluding pandemic lockdown months, June’s slowdown was the most abrupt recorded by the survey since the height of the global financial crisis in November 2008.”

FX implications

EUR/USD remains vulnerable near 1.0500 on dismal euro area PMIs. Money market now price in ~160 bps worth of rate increases as against the ~170 bps estimated before the PMI reports.