Austrian Exchange Consultation Today: Bad for the Euro! Eurozone economic data continues to deteriorate, and the European Bank is expected to maintain stability next month

Excluding epidemic months, the latest data points to the lowest level since April 2013. The eurozone, which consists of 20 countries that use the same currency, grew 0.3% in the second quarter after growing 0.1% in Quarter 1 this year. Analysts polled by Refinitiv believe the ECB is likely to keep interest rates unchanged, with the main rate currently at 3.75%.

European business activity contracted again in August, falling to the lowest level since November 2020。

Announced on WednesdayThe euro area's August composite PMI preview fell to 47.0 from 48.6 in July.According to Dow Jones data, this figureLower than the 48.8 expected by economists.A reading above 50 indicates economic activity is expanding, while a reading below 50 indicates contractionIf epidemic months are excluded, the latest data point to the lowest level since April 2013Cyrus de la Rubia, chief economist at Hamburg Mercantile Bank, said:Eurozone services "unfortunately showing signs of decline, matching the poor performance of manufacturing"。

In terms of sub-indicators for services and manufacturing,The Eurozone services PMI fell to 48.3, a 30-month lowThe manufacturing PMI rose slightly from 42.7 in July to 43.7 this month.

Rubia added: "Taking into account the PMI data in our GDP growth forecast, we have come to the conclusion that,The Eurozone will contract by 0.2% in the third quarter.。”

The Eurozone, which consists of 20 countries that use the same currency, grew 0.3% in the second quarter after growing 0.1% in Quarter 1 this year. This subdued growth shows the impact of rising interest rates and energy prices, as well as sluggish external demand. But it also masks sharp divisions within the region, such as,Germany saw the largest contraction in business activity in August。

Rubia says: "The downward pressure on the euro zone economy in August came primarily from Germany's services sector, which switched from growth to contraction at an unusual pace"He added,The decline in manufacturing output has also fuelled talk that Germany is becoming the "sick man of Europe".

Recent economic data has sparked discussions about what action the European Central Bank might take when it meets next month.

European Central Bank President Christine Lagarde said after the July meeting that the central bank could raise interest rates or pause them, depending on new data.

Melanie Debono, senior European economist at Pantheon Macroeconomics, said in a note to clients: "We are stillIt is expected that service sector inflation will slow down in the coming months, enough to convince the European Central Bank not to raise interest rates after September"But the others did not agree.

"Stagnant employment combined with lower production has led to lower output per capita," says Mr. Rubia.The European Central Bank may more reluctantly pause its rate hike cycle in September。”

According to analysts surveyed by Refinitiv,The European Central Bank is likely to keep interest rates unchanged next monthThe current main interest rate is 3.75%.

EUR/USD daily chart

At 12:32 on August 24, Beijing time, the euro was trading at 1.0866/67 against the dollar.