Final Euro services PMI to hover around four-year high despite easing in July

The flash euro area services and composite PMIs, were 53.8 and 53.7 respectively, down slightly from the recorded four-year highs seen in June. This decrease was primarily driven by a weakening in business expectations. 

"However, new business and output remained relatively strong. The  final estimate of the euro area services PMI in June is expected to tick down from 53.8 (flash) to 53.7. Similarly, the composite PMI is likely to be revised down from 53.7 (flash) to 53.6", says Societe Generale.

Looking at the regional breakdown, the German services and composite PMIs are expected to remain unchanged from the flash estimates of 53.7 and 53.4, respectively. Meanwhile the French services PMI is likely to be revised up (from 52.0 to 52.4) after falling by more than expected. 

"The Italian and Spanish services PMIs are also expected to decline in July. We expect the breakdown of the survey to show a similar picture as the flash estimate, with strength in output and new orders, but weakness in business confidence due to high uncertainty and market volatility", added Societe Generale. 

Input cost pressure remains muted, on the back of low wage growth It is important to note that, the manufacturing PMI would suggest GDP growth of just under 0.4% qoq.