06:46 AM EDT, 08/29/2024 (MT Newswires) -- The European Commission (EC) Economic Sentiment Indicator (ESI) was mainly boosted by the French data, which immediately suggests that optimism around the Olympics boosted sentiment, similar to the PMI, noted ING.

"Oddly," it's not the services sector, but the French manufacturers which saw a marked boost in sentiment, up from -9.4 to -3.8, wrote the bank in a note.

Production expectations have gone through the roof in France, while recent production disappointed, stated ING. There is also a decline in hiring and selling price expectations, which doesn't match the jump in sentiment.

As a consequence, the bank doesn't want to overinterpret the French jump here.

Overall, eurozone manufacturing order books remain weak, recent production didn't improve and inventories remain high, pointed out the bank. This is consistent with a sluggish environment which doesn't signal an expected turnaround in the short-run.

The service sector saw a small improvement in sentiment, driven by France, Italy and Spain. The small improvement was broad-based as recent demand improved and businesses became more optimistic about the future. Employment and selling price expectations both ticked up a bit in the service sector.

In general, the ESI seems in line with continued sluggish economic growth in Q3 for the eurozone, according to ING. Selling price expectations for goods and services aren't showing big moves right now, indicating that core inflation is settling just above 2.5% for the second half of the year.