The chart shows the extreme-adjusted PMIs for manufacturing and for services for the Euro Zone (those countries which have the Euro as their currency), and for the average of manufacturing and services, which should be a good proxy for GDP growth.
The PMIs have now crossed the 50% "recession line", meaning that output is at last starting to expand, in response to interest rate cuts by the ECB. Will this recovery be derailed? Obviously, that's a possibility, but Trump's tariff pagaille is likely to be worse for the US than for Europe. Tariffs will cause a surge in inflation in the US, reducing real incomes and consumption, while also simultaneously delaying further Fed rate cuts.
Meanwhile, in Europe, the EU has agreed to increase defence spending, and to allow increased debt to pay for it, and you may be sure that the increase in defence spending will go towards European (& perhaps Canadian) rather than American contractors. Also, the ECB has leeway to cut interest rates again, because inflation is low, whereas the Fed does not.
The sum of US stagnation/recession, a European recovery, and an Asian upturn (PMIs have started rising there again, after slumping when the tariff war started), means that world growth will improve. But it won't be a boom, that's for sure.
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