Euro area composite PMI likely softened marginally

The euro-area composite PMI likely softened to 53.3 in June from 53.6 prior. Higher oil prices, uncertainty stemming from the Greek reform negotiations and slightly weaker-than-expected global growth are likely taking some steam out of the euro-area recovery. 

That said, the euro area will likely maintain growth rates of c.0.4- 0.5% q/q for the next few quarters, barring a very negative outcome of the Greek situation. There are signs that banks are starting to lend more confidently, and the weaker euro and lower oil price are still supporting the economy. 

This loss of steam is expected to be concentrated mostly in Germany and France. Spain will likely continue to register high growth rates as it still suffers from very high levels of spare capacity. Similarly, growth in Italy will likely accelerate rapidly after four years of stagnation.