The eurozone’s economic downturn may have deepened at the start of the third quarter, with a closely watched business survey falling into territory that suggests the region’s economy is shrinking.
The HCOB flash eurozone composite purchasing managers’ index, a measure of activity at companies across the 20-country bloc, fell to an eight-month low after a sharper than expected slowdown in services and manufacturing sectors in July.
The result is expected to add to calls for the European Central Bank to stop raising interest rates after this week. The euro fell 0.5 per cent against the US dollar to $1.107, while Germany’s rate-sensitive two-year bond yield dopped 6.5 basis points to 3.03 per cent as investors bet against further rate increases following this Thursday’s baked-in 25bp move.