What's going on?

Fresh data out on Thursday showed the eurozone economy was more active than economists had anticipated in August. But every silver lining has a cloud � and German manufacturing sure looks pretty bleak right now.

What does this mean?

August�s activity survey � which asks private company executives in the eurozone how busy they�ve been that month � revealed that activity in the bloc�s services sector (retail, hospitality, and so on) was up from July. Manufacturing activity, meanwhile, slowed its decline in August. And France was a particularly bright spot: activity rose across the board, defying predictions of a slowdown.

Then there was Germany. With economic activity that was higher than expected, the country�s update wasn�t all doom and gloom. But its all-important manufacturing industry is still shrinking, and investors can hear the telltale rumblings of a storm rolling in. And when it rains, it pours.

Why should I care?

For markets: The winds won�t change Europe�s course.
The eurozone economy is in better shape than investors expected, which led some to buy up the euro on Thursday. But cautious investors might’ve learned lessons from earlier in the year: survey data had suggested the eurozone economy was on course for shrinkage in the first quarter, only for the region to report better-than-expected growth. What company bigwigs say they�re doing doesn�t always reflect the day-to-day, so most investors still expect an economy-boosting eurozone interest rate cut in September.

Zooming out: Will investors abandon a syncing ship?
�Global synchronization� drove the investments in Japan�s government pension pot to a loss late last year. And Japan�s economy is still in sync � with the eurozone, at least. Data out on Thursday showed Japanese manufacturing activity fell in August for the fourth month in a row (a strong yen may be partly to blame, making its exports appear expensive). More silver linings, however: the country�s services sector grew, offsetting the decline in manufacturing.