Euro zone continues to grow, while France and Greece falters

According to data published by markiteconomics Euro zone continued its growth in manufacturing sector as of April, however the pace was dragged down by further slowdown in Greece and France.

• Overall growth in Eurozone still commendable with April PMI at 52. Ireland tops the regional list with PMI at 55.8, followed by Spain (54.2), Netherlands (54), Italy (53.8), Germany (52.1) and Austria (50.1). France and Greece registered further slowdown 48 and 46.5 respectively. PMI index reached 22 month low in Greece.

While Euro zone manufacturing continuing its expansion for 22 months at a row, France, Euro zone's second largest economy remains stuck in contractionary zone since May 2014.

• Weaker Euro failed to boost export orders for French manufacturers and French government failed to make progress in key labor reforms.
  
  
• Purchasing activity declined for consecutive 38 months, with drop accelerating to highest pace in more than 15 months.

French finance minister Mr. Sapin indicated that France would be able to bring deficit ti 3% pf GDP from current 4% by 2017 with rise in growth, shrugging calls from Brussels to go for deeper budget cuts. However weaker economic dockets from France continue to pose a question mark over its growth potential without key reforms.

French stocks and govt. bonds remain an attractive long term sell, relative to other European countries such as Germany, Ireland. Spread between German and French bonds would rise in favor of Germany in the long term.