The Weakness of European Economic Activity Sparks Recession Concerns!

<p>&nbsp;Concerns about a recession began to haunt the market after seeing dismal European manufacturing and services PMI data in June.</p><p><br /></p><p>Data released at the start of the European session showed continued weakness in both sectors in the two largest economies of the European Zone, Germany and France.</p><p><br /></p><p>France's manufacturing sector continued to contract for a fifth consecutive month and was the weakest since February 2021 on a decline in output and a faster fall in demand.</p><p><br /></p><p>Meanwhile, service activity fell below the most significant contraction since February 2021 in June due to weak demand following a continued decline in new orders both domestically and abroad.</p><p><br /></p><p>In Germany, manufacturing activity contracted further to a 3-year low following a sharp decline in goods production this month.</p><p><br /></p><p><br /></p><p>The service sector, on the other hand, still recorded expansion but eased to a three-month low due to moderate increases in new business and reduced demand.</p><p><br /></p><p>Overall in the European Zone, manufacturing activity contracted to its weakest level in 3 years and services expanded slowly since January.</p><p><br /></p><p>Apart from the European Zone, investors also looked at the release of PMI data from the UK which also showed a contraction in the manufacturing sector in June to a 5-month low following a sharp drop in new orders due to weak underlying demand.</p><p><br /></p><p>As for services activity, it grew at the slowest rate in 3 months, weakened by rising price pressures.</p>