Investing.com - Private sector output in Germany expanded at the fastest pace in over six years this month, boosting optimism over the euro zone's largest economy, preliminary data showed on Tuesday.
Market research group Markit said that its Flash German Composite Output Index, which measures the combined output of both the manufacturing and service sectors rose from 56.7 in April to 57.3 in May, above forecasts for 56.6. The latest reading was the highest since April 2011.
Sector data signalled ongoing strong growth across both services and manufacturing, notably so in the latter.
The preliminary German manufacturing purchasing managers’ index inched up to a 73-month high of 59.4 this month from a final reading of 58.2 in April. Analysts had expected the index to dip to 58.0 in May.
The flash services purchasing managers’ index declined to 55.2 this month from 55.4 in April, disappointing expectations for a reading of 55.5.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
Commenting on the report, Trevor Balchin, Senior Economist at Markit said, “PMI data for the first two months of the second quarter are signalling continued positive momentum. This supports IHS Markit’s view of growth in the coming quarters remaining strong at around 0.6% on average, and our full-year forecast for 2017 has been raised to 2.0% in calendar-adjusted terms."
EUR/USD was at 1.1262 from around 1.1247 ahead of the release of the data, while EUR/GBP was at 0.8670 from 0.8664 earlier.
Meanwhile, European stock markets were mildly higher after the open. Germany's DAX rose 0.5%, he EURO STOXX 50 tacked on 0.5%, France’s CAC 40 inched up 0.6%, while London’s FTSE 100 added 0.2%.