Europe's flash PMI data out overnight has again seen the largest increases in business activity in over two years

Europe's flash PMI data out overnight has again seen the largest increases in business activity in over two years. Both services and manufacturing expanded by the greatest amount in August, with the Composite PMI Output Index rising to 51.7 from 50.5 in June, a 26 month high. Germany reported the fastest increase in output since January, whilst the rest of the Eurozone also recorded a rise in output for the first time since May 2011. Despite the strongest pace of recovery in more than 2 years, concerns and qualifications remain for the region's future. Major structural issues remain with uneven surpluses and deficits throughout the zone due to the union of monetary policy and a fixed-exchange rate without fiscal unification. Debt to GDP also continues to rise in some countries which already had very high ratios. (VIEW LINK)