EconoTicker

🕕 Tuesday, 24 June 2025

Germany’s key Ifo Business Climate Index rose to 88.4 in June, up from 88.1 in May and above market expectations of 87.5. The data suggests a slight improvement in overall business sentiment across Europe’s largest economy.

• Business Expectations increased to 90.7 (vs. 90.0 expected), the highest level since early 2024
• Current Assessment, however, edged lower to 86.2 (vs. 86.5 expected), signaling continued concerns over present economic conditions

While forward-looking optimism is rising, weak domestic demand and industrial stagnation continue to weigh on the near-term outlook.

HCOB’s Eurozone Composite PMI held at 50.2 in June—below the 50.5 forecast but unchanged from May—as the Services PMI climbed to 50.0, matching expectations and up from 49.7, signalling renewed strength in services. Manufacturing PMI stayed at 49.4, missing the 49.6 estimate and remaining in contraction territory.

HCOB Germany’s Composite PMI jumped to 50.4 in June—well above the 49.0 forecast and up from May’s 48.5—marking a return to overall expansion. Manufacturing PMI ticked up to 49.0, beating the 48.9 estimate and May’s 48.3, though still just below contraction territory. Services PMI improved to 49.4, above the 47.8 consensus and May’s 47.1, signaling easing weakness in the service sector.

HCOB France’s Manufacturing PMI fell to 47.8 in June, below the 49.8 forecast and May’s 49.8, signalling deeper factory‐sector contraction. The Composite PMI declined to 48.5—under the 49.3 estimate and down from 49.3—while the Services PMI eased to 48.7, missing the 49.2 consensus and slipping from 48.9, highlighting broad‐based cooling in economic activity.

Eurozone M3 money supply growth ticked up to 4.0% year-on-year in the latest reading (previous: 3.9%), while private sector loans rose 2.0% YoY (previous: 1.9%), underscoring steady but modest credit expansion.

Eurostat data showed headline CPI in the euro area stood at 1.9% year-on-year in May—matching forecasts and down from April’s 2.2%—with month-on-month prices unchanged at 0.0% (0.6% in April). Core CPI, which strips out energy and food, also held at 2.3% annually and 0.0% monthly, both below prior readings and forecasts. Ex-tobacco inflation fell to 1.8% YoY and –0.1% MoM, signaling broader disinflationary trends. HICP excluding energy and food eased to 2.4% YoY (from 2.7%) and rose just 0.1% MoM (vs. 0.9%), underscoring subdued price pressures across the bloc.

Implication: These data reinforce expectations that the European Central Bank may pause its rate cuts as underlying inflation cools more quickly.

Eurostat reported that the euro area’s current account surplus for April stood at €19.8 billion, well below the €40.4 billion consensus and down from March’s €50.9 billion. On a non-seasonally adjusted basis, the surplus was €19.3 billion versus an expected €60.1 billion, highlighting weaker external demand and widening trade imbalances across the bloc.

Germany’s ZEW Current Conditions index improved to –72.0 in June (forecast: –74.0; May: –82.0), indicating still-deep contractions but less severe than a month ago. The ZEW Economic Sentiment index surged to 47.5 (forecast: 34.8; May: 25.2), marking a substantial rebound in outlook. Across the eurozone, the ZEW Economic Sentiment index also climbed to 35.3 in June (forecast: 23.5; May: 11.6), underscoring rising optimism region-wide.

Eurozone wages rose 3.4% year-on-year in Q1 (Q4: 4.1%), marking the weakest quarterly gain in over a year. However, the Eurozone Labor Cost Index climbed 3.4% YoY (forecast: 3.2%; Q4: 3.8%), underscoring persistent upward pressure on employer labor expenses.

Switzerland’s producer price index fell 0.7% year-on-year in May (April: –0.5%), underscoring a deepening deflationary trend. On a month-on-month basis, PPI dropped 0.5% in May (forecast: +0.1%; April: +0.1%), marking the first contraction after consecutive modest gains.

Eurozone industrial production plunged 2.4% month-on-month in April (forecast: –1.6%; March: +2.4%), marking the steepest decline in over a year. On an annual basis, output grew just 0.8% in April (forecast: 1.4%; March: 3.7%), underscoring slowing factory activity. Meanwhile, the eurozone trade surplus narrowed dramatically to €9.9 billion (forecast: €18.2 billion; March: €37.3 billion), reflecting weaker exports and stronger imports.

Spain’s CPI rose 0.1% month-on-month in May (forecast: 0.0%; April: 0.6%), and annual inflation held at 2.0% year-on-year (forecast: 1.9%; April: 2.2%), indicating continued subdued price pressures. Core CPI, which excludes energy and unprocessed food, came in at 2.2% YoY (forecast: 2.1%; April: 2.4%). The harmonized index of consumer prices (HICP) also stood at 2.0% YoY (forecast: 1.9%; April: 2.2%) with no change MoM (forecast: –0.1%; April: 0.6%).