French business confidence extended its recovery into August, with the country's business climate indicator — compiled monthly by national statistics agency INSEE — rising to 98 from 97 in July and matching expectations of 98. Confidence in both manufacturing and services also continued to nudge higher.

The August reading marks the highest level since February. Even so, the indicator remains below its long-term average threshold of 100, a level it has not touched since May 2024, which underscores that while the direction of travel has improved, French sentiment has not yet returned fully to its historical norm.

The improvement came amid better sentiment across most broader sectors, while employment conditions held steady. The detailed breakdown:

• Manufacturing confidence: 103 vs 101 prior
• Services confidence: 100 vs 99 prior
• Retail trade confidence: 99 vs 96 prior
• Employment indicator: 99 vs 99 prior

Manufacturing stood out among the components, with its reading of 103 sitting above the 100 long-term average, while services matched that threshold at 100.

As the euro zone's second-largest economy, France's survey trends feed into the broader picture of bloc-wide momentum that euro-area policymakers and markets monitor when gauging the region's economic health.

At the very least, the data offer a good signal of how French business sentiment is holding up in the third quarter. A clearer sense of how activity is actually playing out should come from the PMI data due later in the day — diffusion-based surveys in which readings above 50 indicate expansion and below 50 signal contraction.

The release is one of the European data points relevant to the euro (EUR) this session.