French PMI Contraction Continues Divergence With Germany

French business activity contracted further in June while Germany’s private sector continued to expand, further highlighting the divergence between the euro zone’s two largest economies.

In France, both the services and manufacturing sectors registered a slowdown amid weaker orders. Output and new orders in Germany remained strong.

The composite PMI for France, which includes the manufacturing and services sectors, fell to 48.0 from 49.3 in May. A figure below 50 signals contraction. The German composite index came in at 24.2, against 55.6 in May.

“The euro zone is still incredibly reliant on Germany,” Jeremy Stretch, head of FX Strategy at CIBC told CNBC.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza