Recovery gained little traction in Q2

According to recent hard data, next week’s Q2 GDP release may show that the euro-zone’srecovery gained no momentum after Q1’s disappointing 0.2% quarterly rise in GDP. In fact,the performance of industry and exports may even have weakened. The improvement intimely surveys such as the PMI in July provides a glimmer of hope that the euro-zone mayfare a little better in Q3. (See Chart.) But the overall message from recent data seems to bethat the euro-zone’s recovery is nearing a peak before it has really even begun.