Eurozone Economy Revives Amid Middle East Tensions

The Eurozone economy appears to be experiencing a revival in July, according to preliminary S&P Global surveys. The Manufacturing Purchasing Managers Index (PMI) rose to 52 from 51.4, beating expectations of 51.3, while the services sector returned to expansion territory with a reading of 51.6. This lifted the Composite PMI to 51.9, comfortably above market forecasts.

Meanwhile, the British Pound (GBP) also drew support from stronger domestic data. UK Retail Sales rose by 1% MoM in June, defying expectations for a 0.3% decline, and the Services PMI returned to expansion at 51.8 while the Manufacturing PMI accelerated to 52.8.

Despite these encouraging economic releases, the Euro (EUR) and the British Pound struggled to extend their gains due to concerns about the economic consequences of the conflict in the Middle East, higher energy prices, and the latest tariff announcements from US President Donald Trump's administration.