What's going on?

A survey of private companies suggested that the eurozone�s economy shrugged off the Brexit vote in July and did better than expected!

What does this mean?

The survey asks managers at European companies how their businesses are performing and how they think they will perform in the coming months. The good news is that the overall survey, which is measured on a scale that allows for comparisons over time, hit its strongest level in seven months. The bad news is that, when asked about the future, survey respondents were a little more pessimistic about new orders from customers and planned to hire fewer workers. Overall, though, the headline figure was a reasonably good sign for the eurozone�s economy.

Why should I care?

The bigger picture: The gap between the economies in the US and Europe is narrowing.

In previous years, the eurozone�s economy was clearly doing worse than the American economy. But, so far this year, the eurozone�s growth has been moderately better. This is partly because America�s economic growth has slowed versus previous years (which isn�t good for anyone, really). Also, the eurozone�s improved growth shouldn�t mask its years of underperformance versus the US. Still, it is obviously good news to see that Europe�s economy is starting to perform better.


For the markets: All eyes are on the European Central Bank (ECB) meeting on September 8th.
Positive economic data like this makes it slightly less likely that the European Central Bank will announce new extraordinary measures to support the economy (many investors still think it will). That�s because such measures might not be necessary if the economy is starting to improve sustainably.