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Eurozone Construction Output rose 0.78% MoM in March, recovering from the previous -0.77% decline. The rebound points to a stronger signal of monthly construction activity after earlier weakness. Meanwhile, the Labor Cost Index held at 3.30% YoY in Q1, unchanged from the previous 3.30%, showing that wage-cost pressure remains stable.

Importance Level: Low to Medium

Possible Market Effect: The construction rebound is mildly positive for eurozone growth sentiment, while stable labor costs keep inflation pressure visible but not accelerating.

Overall Market Sentiment: Neutral for EUR

Q&A

Did Eurozone construction output improve in March? Yes. It rose 0.78% MoM, after a previous -0.77% decline.

Are Eurozone labor costs accelerating? No. The Labor Cost Index stayed unchanged at 3.30% YoY.

Source: Eurostat

Eurozone preliminary May PMI data weakened. Manufacturing PMI fell to 51.4, below the 51.7 forecast and the previous 52.2, but remained in expansion. Services PMI dropped to 46.4, below the 47.8 forecast and the previous 47.6. The broader Composite PMI fell to 47.5, weaker than the 48.8 forecast and the previous 48.8.

External-account data also weakened. The Current Account surplus fell to 14.9B in March, below the 26.3B forecast and the previous 25.6B. The Current Account n.s.a improved to 24.1B from 21.1B.

Importance Level: High

Possible Market Effect: Weak PMI data are negative for eurozone growth sentiment and may pressure the EUR, especially with services in contraction. The smaller current-account surplus also reduces external support.

Overall Market Sentiment: Sell / Negative for EUR

Q&A

Is the Eurozone Composite PMI in contraction? Yes. It fell to 47.5, below 50.

Which Eurozone PMI component is weakest? Services, which fell to 46.4.

Did the Eurozone's current account surplus weaken? Yes. It fell to 14.9B, below forecast and previous levels.

Source: HCOB / S&P Global; European Central Bank

Germany’s preliminary May PMI data were mixed. Manufacturing PMI fell to 49.9, below the 51.0 forecast and the previous 51.4, slipping just below the 50 expansion line. Services PMI improved to 47.8, beating the 47.1 forecast and the previous 46.9, but remained in contraction. Composite PMI rose slightly to 48.6, above the 48.4 forecast and the previous 48.4.

The report shows Germany’s private sector is still contracting, but the pace of services weakness eased slightly.

Importance Level: Medium

Possible Market Effect: Mixed for EUR. The manufacturing miss is negative, but the better services and composite readings reduce the downside shock.

Overall Market Sentiment: Neutral for EUR

Q&A

Is Germany’s manufacturing PMI still expanding? No. It fell to 49.9, slightly below 50.

Did Germany’s services PMI improve? Yes. It rose to 47.8, but remains in contraction.

Source: HCOB / S&P Global

France’s preliminary May PMI data weakened sharply. Manufacturing PMI fell to 48.9, below the 52.1 forecast and the previous 52.8. Services PMI dropped to 42.9, far below the 46.6 forecast and the previous 46.5. The broader Composite PMI fell to 43.5, weaker than the 47.7 forecast and the previous 47.6.

The data show broad-based contraction, with services leading the weakness.

Importance Level: Medium

Possible Market Effect: Negative for French growth sentiment and mildly negative for the EUR, especially because the services sector showed a deeper slowdown.

Overall Market Sentiment: Sell / Negative for French growth sentiment; Neutral-to-Sell for EUR

Q&A

Is France’s PMI data weak? Yes. Manufacturing, services, and composite PMIs all fell below 50.

Which part of France’s PMI report was weakest? Services, with the index falling to 42.9.

Source: HCOB / S&P Global

Germany’s 10-Year Bund Auction yield rose to 3.160%, up from the previous 3.080%. The higher yield shows that upward pressure in European bond markets remains active, with investors still demanding higher returns amid inflation concerns and tighter global rate expectations.

Importance Level: Low

Possible Market Effect: Higher German yields can offer mild support to the EUR from a rates perspective, but they may pressure rate-sensitive European equities.

Overall Market Sentiment: Neutral-to-Buy for EUR / Neutral-to-Sell for rate-sensitive EU equities

Q&A

Did Germany’s 10-year Bund yield rise? Yes. The auction yield increased to 3.160% from 3.080%.

Is the German Bund auction important for EUR? Mildly. Higher yields can support the euro, but the direct market impact is usually limited.

Source: Deutsche Finanzagentur

Eurozone April inflation was broadly in line with expectations. Headline CPI held at 3.0% YoY, matching the 3.0% forecast and rising from the previous 2.6%. Monthly CPI rose 1.0%, matching the forecast but below the previous 1.3%.

Core inflation was stable. Core CPI YoY came in at 2.2%, matching the forecast and slightly below the previous 2.3%. Core CPI MoM rose 0.9%, matching the forecast and slightly above the previous 0.8%. HICP excluding energy and food came in at 2.1% YoY, matching the forecast and below the previous 2.2%, while the monthly reading rose 0.8%, in line with expectations and above the previous 0.7%.

Excluding tobacco, CPI rose 1.0% MoM, below the previous 1.3%, while annual CPI ex tobacco increased to 3.0% from 2.5%. The CPI n.s.a. index came in at 103.04, slightly below the 103.05 forecast but above the previous 101.99.

Importance Level: High

Possible Market Effect: Eurozone inflation staying at 3.0% keeps pressure on the ECB to remain cautious. The data are slightly supportive for EUR from a rates perspective, but the in-line outcome limits any major surprise.

Overall Market Sentiment: Neutral-to-Buy for EUR

Q&A

Did Eurozone CPI meet expectations in April? Yes. Headline CPI was 3.0% YoY, exactly in line with the forecast.

Is Eurozone core inflation still stable? Yes. Core CPI remained at 2.2% YoY, matching expectations.

What does Eurozone CPI mean for the ECB? It supports a cautious ECB stance, because headline inflation remains at 3.0%.

Source: Eurostat

Germany’s April producer-price data were mixed. German PPI rose 1.2% MoM, below the 2.0% forecast and slower than the previous 2.5%. However, PPI YoY increased 1.7%, above the 1.5% forecast and a sharp reversal from the previous -0.2%.

The data suggest that monthly producer-price pressure has slowed, but the annual trend has turned positive again, pointing to renewed cost pressure in Germany’s industrial sector.

Importance Level: Low

Possible Market Effect: The stronger annual PPI reading may slightly support EUR through firmer inflation expectations, but weaker monthly momentum limits the signal. For German equities, renewed cost pressure may be negative for margins if companies cannot pass costs to consumers.

Overall Market Sentiment: Neutral for EUR

Q&A

Did German producer prices rise in April? Yes. PPI rose 1.2% MoM and 1.7% YoY.

Was German monthly PPI weaker than expected? Yes. Monthly PPI was 1.2%, below the 2.0% forecast.

Is German annual PPI inflation back in positive territory? Yes. Annual PPI rose to 1.7%, compared with the previous -0.2%.

Source: Federal Statistical Office of Germany — Destatis

Importance: Low

Market Sentiment: EUR Neutral

Eurozone Reserve Assets Total fell to 1,888.23B in April, down from 1,908.12B previously. The decline shows a lower reserve-asset position, although this indicator usually has limited direct market impact.

Possible Market Effect:

The signal is broadly neutral for EUR. Markets are more focused on eurozone growth, inflation, ECB policy, and global risk conditions.

Q&A

Did eurozone reserve assets rise in April?

No. Reserve assets fell to 1,888.23B from 1,908.12B.

Source: European Central Bank

Importance: Medium

Market Sentiment: EUR Neutral-to-Buy

Italy’s April inflation figures confirmed stronger annual price pressure. CPI excluding tobacco rose 2.6% YoY, up from 1.5% previously. Headline CPI rose 1.1% MoM, slightly below the 1.2% forecast, while CPI YoY increased 2.7%, below the 2.8% forecast but sharply above 1.7% previously.

The EU-harmonized inflation measure also accelerated. HICP rose 1.6% MoM, slightly below the 1.7% forecast, while HICP YoY rose 2.8%, just under the 2.9% forecast and above the previous 1.6%.

Possible Market Effect:

The data are mildly supportive for EUR because Italian inflation is clearly higher than before, although the slight miss versus forecasts limits the bullish signal.

Q&A

Is Italian inflation accelerating?

Yes. Headline CPI rose from 1.7% to 2.7% YoY, and HICP rose from 1.6% to 2.8% YoY.

Did Italy’s April CPI beat expectations?

No. CPI and HICP were slightly below forecasts, but both accelerated strongly from previous readings.

Source: ISTAT

Importance: Low

Market Sentiment: EUR Neutral-to-Sell

Spain’s Thomson Reuters IPSOS PCSI fell to 46.62 in May, down from 47.16 previously. The decline suggests households remain cautious, even though the index is still stronger than several other European readings.

Possible Market Effect:

The data are mildly negative for Spanish domestic-demand sentiment, but the market impact should remain limited.

Q&A

Did Spain’s consumer sentiment improve in May?

No. Spain’s PCSI declined to 46.62 from 47.16.

Source: Thomson Reuters / Ipsos

Importance: Low

Market Sentiment: EUR Neutral-to-Buy

Italy’s Thomson Reuters IPSOS PCSI rose to 43.38 in May, up from 43.12 previously. The improvement is small, but it shows a modest recovery in household sentiment.

Possible Market Effect:

The data are mildly positive for Italian domestic-demand expectations, but the direct effect on EUR should remain limited.

Q&A

Did Italy’s consumer sentiment improve in May?

Yes. Italy’s PCSI rose to 43.38 from 43.12.

Source: Thomson Reuters / Ipsos

Importance: Low

Market Sentiment: EUR Neutral-to-Sell

Germany’s Thomson Reuters IPSOS PCSI fell to 40.67 in May, down from 41.80 previously. The decline shows weaker consumer confidence and suggests households remain cautious.

Possible Market Effect:

The data are mildly negative for EUR and German domestic-demand sentiment, but the direct market impact should remain limited because this is a low-importance release.

Q&A

Did German consumer sentiment improve in May?

No. Germany’s PCSI fell to 40.67 from 41.80.

Source: Thomson Reuters / Ipsos