Investing.com – Overall economic activity in the euro zone unexpectedly improved in September, bolstering optimism over the region’s economy, preliminary data showed on Friday.
In a report, market research group IHS Markit said that its flash Euro Zone Composite Output Index, which measures the combined output of both the manufacturing and service sectors, increased to 56.7 in September, from the prior month’s reading of 55.7 and beat forecasts a drop to 55.5.
The flash services purchasing managers’ index also unexpectedly rose to 55.6 this month, from the prior 54.7.
Analysts had expected no change.
Finally, the preliminary euro zone manufacturing purchasing managers’ index surprised with an advance to a seasonally adjusted 58.2 this month from a final reading of 57.4 in August. Analysts had expected the index to dip to 57.1 in September.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
“The euro zone economy ended the third quarter on a strong note, with growth of business activity picking up to its highest since May to register one of the strongest gains seen over the past six years,” IHS Markit noted in the report.
“The survey data point to 0.7% GDP growth for the third quarter, with accelerating momentum boding well for a buoyant end to the year,” IHS Markit chief economist Chris Williamson said.
“The rise in business activity and accompanying build-up of price pressures will fuel expectations that the ECB is poised to announce its intention to rein back some of its stimulus, reducing its asset purchases in 2018,” he concluded.
After the report, EUR/USD traded at 1.1993 compared to 1.1994 ahead of the release, while EUR/GBP was at 0.8828 from 0.8826 earlier.
Meanwhile, European stock markets were trading mixed. The Euro Stoxx 50 inched up 0.06%, Germany's DAX decreased 0.05%, France’s CAC 40 advanced 0.25%, while London’s FTSE 100 lost 0.17%.