The S&P Global Italy Manufacturing PMI fell to 51.3 in July 2026 from 52.2 in June, missing market expectations of 52.3 and marking its lowest reading in four months. The slowdown reflected fading support from earlier stockpiling linked to the Iran conflict, as new orders declined again amid subdued demand, with firms citing geopolitical uncertainty and inflationary pressures. Export orders also fell for the first time in five months. Manufacturing output expanded at a softer pace, while longer supplier delivery times provided a positive contribution to the headline index despite reflecting ongoing supply disruptions. Backlogs of work recorded their sharpest decline of the year, and both employment and purchasing activity weakened. At the same time, input cost pressures eased, while business confidence deteriorated.

European stocks started August on a positive note, with the STOXX 50 rising 0.9% and the STOXX 600 gaining 0.3%, as investors prepared for a fresh round of corporate earnings and welcomed lower oil prices after US President Donald Trump said new US-Iran talks would begin on Monday. Airlines led the gains, with Lufthansa (+3.8%) and Ryanair (+3.3%) among the top performers. Airbus (+3.2%), SAP (+3.7%), and Safran (+3.2%) also advanced, while Worldline surged nearly 7% to top the STOXX 600, extending Friday's strong rally. On the downside, AstraZeneca tumbled more than 6% following reports that it was in merger talks with Bristol Myers Squibb on a potential $400 billion deal. Energy stocks also came under pressure as oil prices declined, with Eni (-2.2%), TotalEnergies (-1.8%), and Shell (-1.1%) all trading lower.

The S&P Spain Manufacturing PMI rose to 50.2 in July 2026 from 49.7 in June, hovering just above the expansion threshold. Despite the slight uptick, underlying performance remained weak, as both output and new orders continued to decline. Ongoing Middle East conflict disruptions caused persistent shipping delays, supply chain bottlenecks, and elevated energy and transport costs. However, overall input and output price inflation cooled to a five-month low. In response to sluggish market demand, manufacturers aggressively drew down existing input and finished goods inventories while cutting purchasing activity at the sharpest rate in over a year. Employment contracted marginally for the eleventh consecutive month due to unreplaced staff departures and hiring hesitations. Nevertheless, broader business sentiment rebounded to its highest level since February, driven by long-term growth plans and expectations of an eventual market recovery.

The annual inflation rate eased to 31.75% in July 2026 from 32.11% in June, slightly below market expectations of 31.8%. It marked the lowest reading since March, as price growth slowed particularly for housing and utilities (40.32% vs 45.14% in June), transport (30.83% vs 31.15%), and alcoholic beverages and tobacco (29.38% vs 34.15%). In contrast, inflation accelerated for food and non-alcoholic beverages (37.53% vs 35.45%), clothing and footwear (16.48% vs 14.18%), and furniture and household goods (22.41% vs 22.32%). Despite easing inflation, Middle East-driven energy price volatility is expected to keep the central bank cautious, given the country’s reliance on energy imports. The monetary authority suspended repo funding in March and shifted to its costlier 40% overnight rate, with economists seeing limited scope for rate cuts this year. On a monthly basis, consumer prices rose to a three-month high of 1.78% from 0.99% in June, though slightly below market forecasts of 1.83%.

Germany’s retail sales declined 1.1% month-on-month in June 2026, swinging from a marginally revised 1.2% increase in the previous month and missing market estimates for a 0.5% drop. It marked the sharpest monthly contraction since May 2025, pointing to weaker consumer spending amid persistent economic uncertainty. Food sales fell 1.4%, while non-food sales dropped 1.0%. In contrast, online and mail-order sales rose 0.4%, highlighting continued resilience in e-commerce demand. On an annual basis, retail sales slipped 0.2%, shifting from an upwardly revised 2.1% increase in May and signaling the second time of yearly decline this year.

The RatingDog China Manufacturing PMI declined to a four-month low of 50.9 in July 2026 from 51.7 in June, falling below forecasts of 51.5, as output and new orders grew more slowly. Output continued to rise, while new orders increased for the 14th consecutive month, the longest streak since 2018, supported by stronger foreign sales, which rose for the first time in three months. Meanwhile, employment increased for the second straight month, with job creation reaching its strongest level since August 2023. Delivery times lengthened for the fifth consecutive month, but the extent of the delays remained only marginal. On the price front, input price inflation eased for the third consecutive month to its weakest level since January. Meanwhile, output prices were unchanged after six consecutive months of increases. Finally, business sentiment improved, supported by expectations of stronger market demand, new product development, expanded production capacity, and increased efficiency.