Euro area: PMI begins to recover following US-Iran deal

Research evidence excerpt

Euro area: PMI begins to recover following US-Iran deal

J P M O R G A N Europe Economic Research

23 June 2026

Euro area: PMI begins to recover

following US-Iran deal

• PMI rose 0.9pt after 3.3pts cumulative decline; survey now points to 0.6% ar Economic and Policy Research

growth Raphael Brun-Aguerre

• Demand, employment and sentiment indicators all increased in June (33-1)raphael.x.brun-aguerre@jpmorgan.com8703 2409

J.P. Morgan Securities plc• Input and output prices down significantly due to lower energy prices; data

consistent with 3%oya domestic price pressures

Developments in the Middle East in recent weeks have been significant and are

impacting the Euro area economy. Looking through the noise, the price of Brent

has been declining since early May, with a notable decline seen after the mid-June

announcement of a US-Iran deal. These developments are being reflected in the

June Euro area flash PMI, overall pointing to a stronger pace of growth and reduced

inflationary pressures.

The Euro area composite output index increased 0.9pt to 49.5 this month, leaving

the pace of growth at 0.6% ar, versus 0.3% ar the prior month. Importantly, most

of the responses were collected before the announcement of the US-Iran deal in

mid-June. This leaves the door open for an upward revision of the composite output

survey in the final reading, and we remain comfortable with our view that the Euro

area economy will increase at a 1.0% ar pace in 3Q, following a modest 0.25% ar

gain in 2Q.

Beyond the output reading, the composite PMI details were encouraging. Demand,

employment and sentiment indicators were stronger in June. The decline in energy

prices is reflected in both input (-5.3pts to 64.7) and output (-1.7pts to 55.4) price

indices.