While we are still waiting on the full set...>

EUROPE: While we are still waiting on the full set of European preliminary PMI

data for June, the significant upside surprise for the French print (with all

series now back in expansionary territory) raises two significant points:

- First, there remains considerable uncertainty over economic conditions, as

reflected in both the scale of the upside surprise (for the manufacturing print

the range of analyst estimates spanned 42.0 to 53.0).

- Second, the significant upside surprises in recent data (including the much

better-than-expected rebound in May retail sales observed for the US and UK)

will reignite debate about the shape of the recovery. 

- It is still too early to gauge the full impact of Covid-19 on the economy and

whether there has been permanent scarring, but the strength of some of the

incoming data for May/June nonetheless will raise doubts over the most

pessimistic scenarios for the economic recovery. 

- And, conversely, this may start to reduce scepticism over the integrity of the

equity rally.