Eurozone’s economic sentiment contracted in July

Eurozone’s economic standing in July did not get better, not surprisingly given the negative situation, services, retail, construction and inflation expectations as shown on data published on Tuesday. 

The monthly sentiment from the European Commission against 19 other countries reflects the euro to be 102.7 in July compared to the previous months of June and May with 103.3 and 105.2, respectively. This just shows the economic slowdown. Economists from Reuters are anticipated to drop to 102.6.  

Recently, the European Central Bank President Mario Draghi mentioned to implement further policy easing in the midst of declining growth and even mentioned to see over the ECB inflation target. 

According to Reuters, officials said that the rate reduction in September is highly likely, as well as the government bond purchases and revisions in the policy. 

The decrease in the sentiment index in the month of July was influenced by the lower optimism in the industry as a drop to -7.4 from -5.6 were seen. Services dropped to 10.6 from 11.0 while retail trade declined to 0.7 from 0.1. Also, the construction sector figures changed to 5.0 from 7.6. 

Meanwhile, sentiment from consumers increased to -6.6 from -7.2. 

Another data shows the business climate declined to -0.12 points in July from 0.17 in June, which has been the lowest recorded figure since September 2013. 

Inflation expectations from eurozone consumers slid to 20.6 in July from previous data in June and May with 21.9 and 23.2, respectively. Hence, the selling expectations in the manufacturing sector decreased to 1.7 in July compared to June and May figures of 3.2 and 5.3, respectively.