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• The HCOB Eurozone Composite PMI increased to 50.6 in June, above expectations of 50.2 and up from May’s 50.2, signaling modest but broad-based expansion across the euro area’s private sector and the strongest reading since May 2023.
• The HCOB Eurozone Services PMI climbed to 50.5, beating forecasts of 50.0 and rebounding from May’s 49.2 (note: your last figure appears truncated), marking the first return to expansion in the services sector in three months.

The improvement reflects better performance in services and stabilization in overall business activity, helped by rising domestic demand and easing inflation pressures, even as manufacturing continues to struggle with weak orders.

Analysts emphasize that the stronger composite and services PMIs suggest the eurozone economy is gaining traction after months of stagnation, but warn that ongoing weakness in industry and subdued external demand could still limit the speed and sustainability of recovery.

• The HCOB Germany Composite PMI climbed to 50.4 in June, matching expectations and up sharply from May’s 48.5, signaling Germany’s private sector has returned to modest expansion after two months in contraction.
• The HCOB Germany Services PMI rose to 49.7, beating forecasts of 49.4 and jumping from May’s 47.1, indicating a significant easing in the pace of contraction in the services sector, though it remains just below the 50 threshold.

The improvement reflects stronger activity in services and stabilization across private sector output, as businesses saw better demand conditions. However, manufacturing continues to lag, with ongoing weakness in new orders and export markets.

Analysts emphasize that while the rebound in the composite PMI is encouraging, the services sector’s continued reading below 50 underscores fragile momentum, and persistent headwinds — including weak domestic demand and high costs — could limit Germany’s recovery in the second half of 2025.

• The HCOB France Composite PMI came in at 49.2 in June, above expectations of 48.5 but slightly down from May’s 49.3, signaling the private sector remains in mild contraction for the fourth straight month.
• The HCOB France Services PMI rose to 49.6, better than forecasts of 48.7 and up from May’s 48.9, yet still below 50, indicating continued but easing contraction in the services sector.

The results reflect slower declines in new orders and business activity, suggesting tentative stabilization; however, firms continue to face weak domestic demand, cautious hiring, and persistent cost pressures.

Analysts emphasize that while the services rebound is encouraging, the composite’s slight dip underscores fragile momentum in France’s economy, supporting expectations that the eurozone’s second-largest economy will struggle to achieve robust growth without stronger demand recovery.

• The HCOB France Composite PMI rose to 49.2 in June, above expectations of 48.5 and slightly higher than May’s 49.3, but still below the 50.0 threshold, indicating the private sector remains in mild contraction for the fourth consecutive month.
• The HCOB France Services PMI increased to 49.6, better than forecasts of 48.7 and up from May’s 48.9, yet also remaining below 50, signaling continued but easing contraction in the services sector.

The upticks reflect slower declines in new orders and business activity, suggesting tentative signs of stabilization, but firms continue to report weak domestic demand, cautious hiring, and persistent cost pressures as headwinds.

Analysts note that while the improvement is welcome, the PMIs staying below 50 highlight fragile momentum in France’s economy, reinforcing expectations that the eurozone’s second-largest economy will struggle to gain strong traction without clearer signs of demand recovery.

• The HCOB Italy Composite PMI — which combines manufacturing and services activity — slipped to 51.1 in June, down from May’s 52.5, signaling slower overall private sector growth, though still indicating modest expansion above the 50.0 threshold.
• The HCOB Italy Services PMI fell to 52.1, below expectations of 52.6 and down from May’s 53.2, marking the lowest reading since January as growth momentum in the services sector cooled.

The declines reflect slowing demand growth and softer job creation, with many firms citing ongoing economic uncertainty, high borrowing costs, and weaker new orders as key constraints.

Analysts note that while both indices remain above 50 — signaling continued expansion — the downtrend highlights mounting challenges for Italy’s economy, suggesting that sustained support may be needed to keep growth on track in the second half of 2025.

Spain’s HCOB Services PMI climbed to 51.9 in June, above expectations of 51.1 and up from May’s 51.3, marking the strongest expansion in the services sector since February and indicating improving momentum in Spain’s key services industry.

The uptick was driven by faster growth in new business and stronger job creation, as demand for services — especially tourism and consumer-facing sectors — benefited from the start of the summer holiday season and improving domestic confidence.

Analysts note that the data highlights Spain’s services sector as a bright spot in the eurozone, providing resilience even as manufacturing struggles and broader euro area growth shows signs of stagnation.

• Consumer price index (MoM) increased 0.2% in June, above expectations of 0.1% and prior month’s 0.1%, reflecting a slight uptick in monthly price pressures, driven by higher costs for energy, transportation, and select services.
• CPI (YoY) rose to 0.1%, beating expectations of -0.1% and ending two consecutive months of negative annual inflation, signaling a tentative shift away from deflationary territory.

Analysts note that while the rise in inflation is modest, it highlights stabilizing price dynamics in Switzerland, which could influence the Swiss National Bank’s monetary policy path after its recent rate cut. However, overall inflation remains well below the SNB’s 2% target, suggesting limited immediate pressure for further tightening.

Germany’s latest 10-year Bund auction cleared at a yield of 2.630%, up from the previous auction’s 2.540%, reflecting higher borrowing costs for the German government amid shifting market expectations for eurozone interest rates.

The rise in yields comes as investors scale back bets on aggressive European Central Bank rate cuts, with recent data showing sticky core inflation and signs of resilience in parts of the eurozone economy, prompting markets to demand higher returns on long-term debt.

Analysts note that the increase in Bund yields could tighten financing conditions across Europe, raising the cost of capital for businesses and households and potentially weighing on investment and growth prospects.

The eurozone unemployment rate edged up to 6.3% in May, above expectations and April’s reading of 6.2%, marking the first increase since early 2023 and highlighting growing signs of labor market softening across the currency bloc.

The uptick comes amid persistent weakness in manufacturing, slowing consumer spending, and elevated borrowing costs, which are discouraging businesses from expanding hiring despite recent disinflation trends.

Analysts warn that the rise in unemployment may signal mounting challenges for eurozone growth, as weakening job creation could weigh on household incomes and spending, increasing pressure on the European Central Bank to calibrate its monetary policy carefully in the coming months.

Italy’s monthly unemployment rate climbed to 6.5% in May, well above expectations of 6.0% and higher than April’s 6.1%, marking the highest level since mid-2023 and signaling emerging weakness in the Italian labor market.

The unexpected increase reflects a slowdown in hiring across key sectors, including manufacturing and services, as businesses remain cautious amid sluggish economic growth, elevated financing costs, and ongoing eurozone uncertainty.

Analysts warn that the rise in unemployment underscores fragile momentum in Italy’s recovery, adding pressure on policymakers to support labor demand and avoid a broader economic slowdown in the second half of 2025.

Spain’s unemployment change showed a decline of 48.9K in June, falling short of expectations for a 69.5K drop and weaker than May’s 57.8K decrease — signaling a slower pace of labor market improvement at the start of the summer hiring season.

Despite the miss, the reduction in jobless figures still points to seasonal strength in employment, driven by tourism and hospitality hiring. However, analysts note that the smaller-than-expected drop suggests underlying softness in the labor market, with uncertainty in broader eurozone growth and consumer confidence weighing on permanent job creation.

The data highlight that while Spain’s labor market remains relatively resilient, momentum may be slowing, requiring sustained economic support to avoid stagnation later in 2025.

• Eurozone headline CPI (YoY) rose 2.0% in June, matching expectations and up from 1.9% in May, reaching the European Central Bank’s inflation target for the first time since mid-2021.
• Headline CPI (MoM) increased 0.3%, a notable rise from flat readings in previous months, reflecting renewed monthly price pressures.
• Core CPI (YoY), which excludes volatile food and energy prices, was steady at 2.3%, in line with forecasts and unchanged from May, highlighting sticky underlying inflation.
• Core CPI (MoM) jumped 0.4%, signaling persistent pressures in services and other core categories.
• The HICP ex Energy & Food (YoY) — a key ECB focus — also held at 2.4%, with monthly growth of 0.3%, slightly above the previous 0.1% reading.
• The overall CPI index (n.s.a.) rose to 129.07, from 128.71 in May.

The data underscore that while headline inflation has aligned with the ECB’s target, core inflation remains uncomfortably elevated, which could delay aggressive rate cuts despite the recent moderation in energy-driven price gains.