FXTRADING Economic Data Summary (Asia-Pacific | 07/07)

Eurozone Investor Confidence Continues to Recover

The Eurozone Sentix Investor Confidence Index rose from -13.4 to -3.1 in July, marking its third consecutive monthly improvement. The Current Situation Index increased from -20.0 to -14.8, remaining in negative territory but showing clear improvement, while the Expectations Index climbed from -6.5 to 9.3, returning to positive territory. The data suggest that investors have become significantly more optimistic about the region's economic outlook, with overall confidence continuing to recover across the Eurozone.

Germany remained the main driver of the improvement. As policy measures gradually take effect, expectations for a recovery in the German economy have strengthened. At the same time, easing tensions in the Middle East helped push oil prices lower, reducing inflationary pressures. The Sentix Inflation Barometer improved from -38.0 to -13.75, while markets increasingly believe that further monetary tightening by the European Central Bank is becoming less necessary. FXTRADING Analysis: Investor confidence has continued to recover, supported by improving economic conditions in Germany, easing inflationary pressures, and more stable policy expectations. Together, these factors have strengthened expectations for the Eurozone's economic recovery, giving the European Central Bank greater flexibility in future policy decisions.

UK Manufacturing Continues to Expand

The UK's final Manufacturing PMI eased from 53.9 to 52.5 in June, below the preliminary reading of 53.1, but remained above the 50-point expansion threshold for the eighth consecutive month. Factory output continued to grow at one of its fastest paces since September 2024, indicating that the manufacturing sector remains resilient despite a moderation in the pace of expansion.

The boost from earlier customer stockpiling has begun to fade, leading to slower growth in new orders, while businesses remain cautious about the outlook. Meanwhile, supply chain pressures continued to lift the cost of some raw materials, although lower energy prices helped ease overall cost pressures, and the pace of output price increases also moderated. Going forward, sustained growth will depend more on a genuine recovery in underlying demand. FXTRADING Analysis: UK manufacturing remains in expansion territory, but support from inventory rebuilding is gradually weakening. The performance of new orders will be the key factor determining whether the sector can sustain its recovery.

Canadian Economy Returns to Growth

Canada's real GDP increased by 0.5% month-on-month in April, exceeding market expectations of 0.4% and reversing the 0.1% decline recorded in March. Fourteen of the country's twenty major industries expanded during the month, with the goods-producing sector rising 1.2%, led by mining, quarrying, and the oil and gas industry. The services sector also recorded its third consecutive monthly increase, growing by 0.3%.

Preliminary data indicate that GDP is expected to rise by a further 0.1% in May. Although growth is moderating, the economy remains on an expansion path. Financial and insurance services, real estate, and rental and leasing activities continued to provide support, while weaker wholesale trade and agriculture, forestry, fishing, and hunting partially offset the gains. Overall, the economy continues to show signs of a moderate recovery. FXTRADING Analysis: Canada's economy has returned to a growth trajectory, with both the resource sector and services sector supporting expansion. As long as domestic demand remains stable, the economy is likely to maintain moderate growth.

Swiss Manufacturing and Demand Improve Together

Switzerland's KOF Economic Barometer rose from 98.6 to 101.2 in June, beating market expectations of 99.4 and moving back above the long-term average level of 100. The reading points to a clear improvement in economic conditions, with growth momentum strengthening further.

Manufacturing was the primary driver of the latest improvement, while production indicators strengthened significantly. External demand and private consumption also improved simultaneously. Better export conditions alongside stronger consumer spending have reinforced the foundations of Switzerland's economic recovery, supporting a more positive growth outlook. FXTRADING Analysis: With the KOF Economic Barometer moving back above its long-term average, manufacturing, exports, and consumer spending are collectively supporting the economic recovery, increasing the likelihood that Switzerland will maintain a path of moderate growth.