Eurozone private-sector business activity hit a one-year high in May, indicating a solidifying economic rebound, Bloomberg reported on Thursday. S&P Global's purchasing managers' index (PMI) rose to 52.3, surpassing analyst forecasts and marking three consecutive months above the 50 growth threshold. "This looks as good as it could be," said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank. "The eurozone's economy is gathering further strength with new orders growing and steady hiring." German bonds weakened, with the two-year yield rising five basis points to 3.06 per cent, the highest since November, as money markets adjusted expectations for European Central Bank rate cuts. Currently, 60 basis points of cuts are priced for this year, down from three virtually fully priced cuts last week. Germany's PMI exceeded expectations, buoyed by manufacturing, while France unexpectedly slipped into contraction due to underperforming services. "While people love to compare economies, the good news is that both Germany and France are moving in tandem," de la Rubia noted. "France has good chances to catch up in services, which would strengthen eurozone growth."
