Week Ahead – Economic Indicators (Europe)

For the June 22nd week, here is a list of all of the major economic indicators being released during the EU Session, with a brief synopsis of what they represent and what to possibly expect from the markets in reaction.

Tuesday
French, German, UK and Eurozone PMI’s
Manufacturing
The Manufacturing Purchasing Managers’ Index (PMI) measures the activity level of purchasing managers in the manufacturing sector. A reading above 50 indicates expansion in the sector; below 50 indicates contraction. Traders watch these surveys closely as purchasing managers usually have early access to data about their company’s performance, which can be a leading indicator of overall economic performance.
Services
The Services Purchasing Managers’ Index (PMI) provides an estimate of service sector business activity for the preceding month by using information obtained from a representative sector survey incorporating transport and communication, financial intermediation, business services, personal services, computing and IT and hotels and restaurants. Results are compiled into a single index which can range between zero and 100.
Composite
The Composite PMI Index measures the activity level of purchasing managers in both sectors (manufacturing and services).
What to expect:
A reading above 50 signals rising activity versus the previous month and the closer to zero the faster is activity contracting. The data are compiled by the Chartered Institute of Purchasing and Supply and Markit.
A higher than expected reading should be taken as bullish for the GBP/EUR, while a lower than expected reading should be taken as bearish for the GBP/EUR.

Wednesday
German IFO’s
Business Climate
The German Ifo Business Climate Index rates the current German business climate and measures expectations for the next six months. It is a composite index based on a survey of manufacturers, builders, wholesalers and retailers. The index is compiled by the IFO Institute for Economic Research.
Expectations
German Business Expectations rates the expectations of businesses in Germany for the following six months. It is a sub-index of the German Ifo Business Climate Index.
Current Conditions
The German Current Assessment rates current business conditions in Germany, without considering future expectations. It is a sub-index of the German Ifo Business Climate Index.
What to expect:
A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.