The Manufacturing Sector In Euro-Zone And UK Improves Beyond Expectations

The week started in Europe with manufacturing data presented by the Euro-Zone and UK, which have been expanding since the start of this year, due to the weakening of both the Euro and the Pound, accordingly, boosting exports in the continent.

The final Euro-Zone PMI Manufacturing index for the month of July came out better than the expected and the previous 56.5, as the index reached 56.7, the best performance in nearly three months.

The data supports growth expectations in the European continent and support recovery over the upcoming quarter throughout the 16-nation economies, despite that the European common currency continue on gaining momentum against the dollar, where the EUR/USD pair is currently trading at a two-month high.

In Germany, the same report signaled that conditions continue on expanding, where the index preserved the previous 61.2 reading, which was also expected by markets, it's worth mentioning that a reading above 50 is considered an expansion in the sector.

Demand improved on a global scale during the second quarter of this year, which affected various sectors in the region positively, where the German automaker; Volkswagen AG presented higher than expected profits during the second quarter of this year and the best performance over the past two-years as the company noted that demand is improving globally.

For the second consecutive week, the European economies have been posting positive performance from various sectors, at the meantime, global economies that is highly bonded with Europe have been posting weaker data, where the US growth pace eased during the second quarter of this year, along with China's data as Beijing took several measures to slowdown the economy's growth rate.

Fears of Europe's debt problems diminished during the past few days after the European Central Bank (ECB) released the results of Bank's Stress Test results that was performed on 91 banks in the Euro, or nearly 65 percent of the financial sector in the continent. The results were rather optimistic as seven banks from the total 91 banks failed the test and were found in need for additional capital