Investors pore over the latest PMI readings from Europe for confirmation that the recovery in the euro zone, at least, is intact. As Ivor Bennett reports, service sector growth in both China and Japan softened in July.
Better numbers may be standard euro zone fare in recent months. It's still rare for Italy to get the edge. This time, it's the only one of the four largest euro members to record faster services growth. As France slipped in July - and Germany slowed to a ten-month low. Even so, a composite PMI reading of 55.7 - which includes manufacturing too - does look good. SOUNDBITE (English) CITY INDEX MARKET ANALYST, KEN ODELUGA, SAYING: "Clearly the 60 billion odd, maybe slightly more, worth of stimulus for several years will have that impact. We're talking about the central bank's, the ECB's quantitative easing programme. It finally began to actually bear fruit about a year to 18 months ago." Analysts were a bit more picky over China. Its latest services reading dropped to one of the lowest levels in a year. Japan too, weaker: despite better manufacturing data this week, softer services are weighing on its outlook. SOUNDBITE (English) CITY INDEX MARKET ANALYST, KEN ODELUGA, SAYING: "For Japan, what we're seeing is really the fits and starts of a, maybe, halting recovery For China, I don't really think it's showing any cause for concern. There are a number of influences, quite deliberate influences, in China which are trying to moderate the pace of growth to ensure that it's at least more sustainable than it looked like a few months ago." The UK dished up 'steady but sluggish' growth, according to the survey gatherers. July services edged up from June's four-month low, slightly above forecasts ... The economy expanding, they estimate, at a quarterly rate of 0.3 per cent. Inflation and Brexit uncertainty, though, still the two ingredients that could spoil appetites for future spending.