The third release confirmed that euro-zone GDP rose by a healthy 0.6% q/q in Q2, with the region’s largest five economies expanding by between 0.4% and 1.5% on the quarter. On the face of it, the Composite PMI for July and August points to another 0.6% rise in Q3. Admittedly, July’s hard data for Germany and France have painted a less positive picture and the future output index of the PMI suggests that growth may have passed its peak. But with consumer and business confidence still at very high levels and export orders showing no signs of damage from the euro’s strength so far, we expect any slowdown in the second half of the year to be modest.
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