Germany feels slowdown in China, but France sees small rebound

Germany's PMIs fell more than expected, pulled down particularly by lower manufacturing confidence, but the levels are still high indicating a growth rate around 0.4 % in the third quarter of 2015.

"Domestic demand appear to keep up the German incoming orders reflecting lower demand from emerging markets and China. This effect could be more than temporary since it is already visible in incoming orders", says Nordea Bank.

French confidence surprised on the upside in September. Both manufacturing and service sector confidence rose from the previous month. The French manufacturing sector appears to be struggling with growth, not really getting a stable grip of it. This month the PMIs again point towards cautious growth after two months of contraction.

"The French economy did not grow in Q2 and PMIs suggest that some marginal growth might be seen in Q3. The French economy still has a long way to go in order to reach solid growth. The labour market developments do not look promising and point towards continued gloomy times ahead", added Nordea Bank.