PMI data shows Brexit vote has not slowed euro area's economic growth

PMI data released by Markit earlier on Wednesday showed that eurozone economic growth ticked higher at the start of Q3.  IHS Markit's measure of private-sector activity, known as the composite Purchasing Managers Index, rose to 53.2 in July from 53.1 in June. The final PMI for was revised higher from a preliminary estimate of 52.9.

Today's composite PMI is in line with other early indications of Brexit’s impact on the eurozone economy and suggests the recovery is likely to continue over coming months. A survey released by the European Commission last week showed eurozone business confidence picked up in July. The region appears to have so far largely shrugged off Britain's vote in late June to quit the European Union.

“It suggests the region saw little overall contagion from the UK’s ‘Brexit’ vote,” said Chris Williamson, Markit’s chief economist.

The employment developments were generally positive with the strongest reading for over five years. There was a significant increase in input price increases within the services sector, primarily due to an increase in staff costs, while there was a slowdown in the rate of decline for output prices, which will provide some relief to the ECB.

The single currency showed little reaction as EUR/USD held just above 1.1200, while German bunds were also little changed with the Eurostoxx index down around 0.40 percent.