Flash PMI indices for August from France and Germany were released today at 8:15 am BST and 8:30 am BST, respectively. Data was expected to show manufacturing sector indices in both countries remaining in contraction territory (below 50 points), while services sector indices were expected to remain in expansion territory (above 50 points).

French data turned out to be a mix package - manufacturing PMI missed expectations noticeably and dropped to 42.1, while services index showed a massive beat, jumping from 50.1 in July to 55.0 in August. EUR and European indices jumped following the release, but this move higher was short-lived and was fully erased by the time German data was released.

German data turned out to be a disappointment, with both indices missing expectations. However, services sector managed to remain in expansion territory. EUR and indices from the Old Continent moved lower following release of German data.

Beat in French services data most likely came from Olympics Games, which were held in the country from July 26 to August 11. France experienced a massive inflow of tourists and visitors during the Olympics, who generated a spike in demand for services, especially hospitality and leisure services. Having said that, beat in services was driven by one-off factors and German data should be more reflective of the overall condition with major European economies.

France, flash PMIs for August

  • Manufacturing: 42.1 vs 44.4 expected (44.0 previously)
  • Services: 55.0 vs 50.3 expected (50.1 previously)
  • Composite: 52.7 vs 49.2 expected (49.1 previously)

Germany, flash PMIs for August

  • Manufacturing: 42.1 vs 43.5 expected (43.2 previously)
  • Services: 51.4 vs 52.3 expected (52.5 previously)
  • Composite: 48.5 vs 49.2 expected (49.1 previously)

Source: xStation5