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The Euro area economy clearly lost momentum in early 2018 as the EZ PMI composite index has fallen from a peak of 58.8 in January 2018 to 54.1 in May, an eighteen month low, points out the research team at RBS.

Key Quotes

“Weakness was widespread. Rising fears of a global trade war and increased political tensions in Italy pose downside risks but the softer Euro is a supportive factor particularly for manufacturers. The European Central Bank are predicting a temporary slowdown, pointing to QE exit by end-18.”