FX.co ★ Eurozone Economic Sentiment Softens In June

Economic confidence in the Eurozone unexpectedly declined in June, highlighting the persistent fragility of the economy, according to survey data released by the European Commission on Thursday.

The economic confidence index fell to 95.9 in June, down from 96.1 in May. Analysts had anticipated a slight increase to 96.2.

The index largely reflected stable sentiment in industry, among consumers, and service providers. However, confidence in both the construction and retail sectors worsened from May.

Unexpectedly, the industrial confidence index dropped to -10.1 in June from -9.9 in May, contrary to forecasts which anticipated a rise to -9.6.

The services sentiment index also dipped to 6.5 in June, from 6.8 the previous month. This was slightly above the forecasted 6.4.

The consumer confidence index improved slightly to -14.0, a marginal increase from -14.3 in May, aligning with the flash estimate.

In retail, the trade sentiment index fell to -7.8 from -6.8 in May. Similarly, the construction confidence index decreased to -7.0 from -6.2 the previous month.

Overall economic uncertainty increased further, with the corresponding index dropping to 18.0 in June from 18.5 in May.

The employment expectations indicator also saw a decline, falling to 99.7 from 101.3 in May. This drop is attributed to significantly lower employment plans in retail trade, construction, and services sectors.

Lily Millard, an economist at Capital Economics, noted that the economic sentiment survey reflects weak growth in the Eurozone's GDP. She indicated that while price pressures have eased in manufacturing, they remain strong in the services sector.