020 7898 0500It was a busy day for the eurozone yesterday, as we saw manufacturing PMI from Germany and the eurozone. In June, the Germany manufacturing PMI dropped to 55.9 from 56.9 the month before, which was in line with expectations and the weakest pace of expansion since December 2016. Across the eurozone, it fell to 54.9 from 55.5 and was slightly below expectations of 55.0.
The unemployment rate in May for the eurozone came in at 8.4% which was better than the 8.5% expected and is the lowest level since December 2008. The euro had a tough time against the dollar, as did a basket of currencies around the world.
There is a genuine chance that Angela Merkel’s coalition government could be brought down if she cannot agree a compromise on migration policy with her interior minister, Horst Seehofer. The coalition has barely been in office for 100 days but tensions are already surfacing, with Horst said to have rejected the arrangements Merkel made with other EU leaders last week. The two have agreed to meet once again in a bid to save the centre-right alliance, but there is no guarantee they will be able to find an arrangement they are both happy with.
Today we will see retail sales for May with tomorrow bringing composite and services PMI from Germany and the Eurozone.
