• July flash services PMI 49.8 vs 47.5 expected
• Prior 46.8
• July flash manufacturing PMI 50.0 vs 51.0 expected
• Prior 51.2
• July flash composite PMI 49.6 vs 47.8 expected
• Prior 47.2

The services print is a 7-month high and that is carrying the French economy in July, amid a step back in the manufacturing sector on the month.

Of note, demand for services was seen rising for the first time since November last year. So, that brought much stabilisation to the overall economy – even if still in contraction territory, albeit marginally.

That being said, private sector employment remained under pressure and declined again while business optimism stayed subdued. So, there’s that.

The only other good news at least is that input cost and output price inflation rates eased for the second month in succession. But with renewed tensions between the US and Iran, it’s hard to imagine that as being much of an optimistic takeaway at this stage.

S&P Global notes that:

“While the latest survey data brought with it good news in the form of the France PMI rising further from its May low and inflationary pressures easing, it feels overly optimistic to bank on this momentum continuing given renewed pressures on oil and gas markets in recent days. This also raises the odds of the European Central Bank delivering more monetary policy tightening, which would exacerbate these headwinds.

“Escalating tensions between the US and Iran bring fresh uncertainty about inflation, borrowing costs and geopolitics more broadly, and uncertainty has so often been to the detriment of the French economy in recent years.”

This article was written by Justin Low at investinglive.com.