Sat, Jun 22, 2024

Euro Zone Business Activity Downturn Deepens in December

EURCHF is moving in Ascending channel and market has reabounded from the higher low area of the channel

EURCHF is moving in Ascending channel and market has reabounded from the higher low area of the channel

In December, euro zone business activity experienced a surprising and deepening downturn, signaling a potential recession in the bloc’s economy. This article will explore the various aspects of this economic decline.

Widespread Decline Across Germany and France

The downturn was broad-based, affecting not only the overall euro zone economy but also individual countries like Germany and France. Both services and manufacturing sectors witnessed deteriorating activity levels, raising concerns about the economic health of the region.

Recession on the Horizon

 

euros currency notes ten and twenty

Official data from the last quarter already indicated a contraction of 0.1% in the euro zone economy. Now, the December Purchasing Managers’ Index (PMI) suggests that economic activity has declined every month in this quarter. If this trend continues, it would mark two consecutive quarters of economic contraction, meeting the technical definition of a recession.

European Central Bank Adjusts Growth ForecastsEURNZD is moving in box pattern and market has reached support area of the pattern

EURNZD is moving in box pattern and market has reached support area of the pattern

The European Central Bank (ECB) recently adjusted its growth forecasts for 2023 and 2024, reflecting the challenges facing the euro zone economy. This article will delve into the factors contributing to these revised projections.

Germany’s Economic Woes

Germany, Europe’s largest economy, saw a worsening downturn in December, raising concerns of a recession by year-end. This section will explore the factors affecting Germany’s economic performance and its outlook for the near future.

France’s Deteriorating Economic Conditions

EURO Bank of France head Villeroy said there is no reason to increase rate hikes by this year or the end of next year.

In France, economic activity declined faster than expected, driven by weakened demand for goods and services. This section will examine the specific challenges facing France and how they impact the broader euro zone.

Mixed Signals from the UK

EURAUD is moving in Ascending channel and market has reached higher low area of the channel

EURAUD is moving in Ascending channel and market has reached higher low area of the channel

While the euro zone faces economic challenges, the United Kingdom’s services sector saw a pick-up in growth in the same period. This contrast raises questions about the overall economic trajectory in Europe and the potential implications for the UK.

Bleak Job Market Prospects

The euro zone’s job market is under strain, as firms reduced staffing for a second consecutive month. The article will discuss the implications of a shrinking job market and its relation to the economic downturn.

ECB’s Interest Rate Policy

ECB Governing Council member Madis muller said ECB will not scale back asset purchases until March 2023 until ultra loose monetary policy seems in the market.

The European Central Bank’s recent decision to leave interest rates unchanged and its stance on potential rate cuts will be explored in this section. Additionally, we’ll look at the opinions of key figures within the ECB.

Factory Output Challenges

Factories in the euro zone had another disappointing month in terms of output. However, there is some optimism about the future. This section will delve into the contrasting indicators within the manufacturing sector.


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