EURO: Eurozone PMI Indicates Business Activity Growth in March
The Euro zone Services and Composite PMI data came at higher pace since May 2023. Downturn in Manufacturing PMI numbers but Services, purchasing manager index climbed up higher makes Euro currency stronger against USD today.
EURUSD is moving in Descending channel and market has reached lower high area of the channel
The purchasing power increasing in the March month after the eight months dryness in the Euro zone.
The latest survey indicates that business activity in the Eurozone expanded in March, marking the first growth since May 2023. However, the recovery was uneven, with a robust upturn in the services sector offsetting a deeper downturn in manufacturing.
The Composite Purchasing Managers’ Index (PMI) for the Eurozone, a key measure of overall economic health, rose to 50.3 in March from 49.2 in February, surpassing the initial estimate of 49.9. This movement pushed the index back above the 50 mark, indicating growth rather than contraction.
Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, noted the positive shift in the service sector, with activity stabilizing in February and showing signs of moderate growth in March. The services PMI surged to 51.5, exceeding the flash estimate of 51.1 and reaching its highest level since June.
Although manufacturing faced challenges, with a deepening downturn reported last month, there were tentative signs of recovery. Demand for services increased, as reflected in the new business index rising to 51.4 from 49.8.
De la Rubia expressed optimism about future growth, especially noting the resumption of growth in new business after an eight-month dry spell. He highlighted factors such as wage growth outpacing inflation, which bolsters household purchasing power.
Overall, with the services industry returning to growth, optimism about the future surged. The composite future output index soared to 61.8 from 60.5, reaching a level not seen in over two years.
EURO: Eurozone composite PMI hits 10-month high on strong services sector
The Euro zone Services and Composite PMI data came at higher pace since May 2023. Downturn in Manufacturing PMI numbers but Services, purchasing manager index climbed up higher makes Euro currency stronger against USD today.
EURCAD is moving in downtrend line and market has reached lower high area of the pattern
The purchasing power increasing in the March month after the eight months dryness in the Euro zone.
Revised data from Hamburg Commercial Bank (HCOB) revealed that the eurozone’s private sector experienced its first expansion in economic activity in ten months, as indicated by the second estimate of the eurozone composite purchasing managers’ index (PMI). This index, measuring conditions across both manufacturing and services sectors, rose to 50.3 in March, up from the initial reading of 49.9 and surpassing February’s level of 49.2.
This uptick marked the first increase in economic activity since May 2023. The improvement was primarily driven by the services sector, which saw its PMI climb to 51.5 from 50.2, offsetting continued weakness in manufacturing, where the PMI dipped to 46.1 from 46.5.
HCOB attributed this growth to the stabilization of demand and ongoing efforts to address backlogs of work, alongside a third consecutive month of net employment gains in the region. Additionally, business activity expectations reached their highest level since February 2022, with inflationary pressures showing signs of easing.
HCOB also released services PMI data from Italy, France, and Germany, all of which exceeded expectations for March, though only Germany witnessed an expansion in activity.
Cyrus de la Rubia, chief economist at HCOB, expressed optimism about the gradual recovery of the eurozone services sector, emphasizing the resumption of growth in new business after an eight-month dry spell. He highlighted the expected continuation of this favorable trend, driven by wage growth outpacing inflation and boosting the purchasing power of households, leading to increased spending on services such as dining out and travel.
EURO: Eurozone’s Service Sector Boosts Economic Pulse: Potential for Stock Surge
The Euro zone Services and Composite PMI data came at higher pace since May 2023. Downturn in Manufacturing PMI numbers but Services, purchasing manager index climbed up higher makes Euro currency stronger against USD today.
EURUSD is moving in Descending channel and market has reached lower high area of the channel
The purchasing power increasing in the March month after the eight months dryness in the Euro zone.
The Eurozone’s private sector is experiencing a notable surge in growth, reaching a peak not seen in ten months, driven predominantly by the robust performance of the services sector. While investor confidence remains buoyant, the extent of further stock market gains hinges on the sustained decline in inflation and the possibility of European Central Bank (ECB) rate cuts. However, escalating oil prices pose a looming threat to market stability.
The Eurozone’s economic landscape is marked by a resurgence, evident in the latest business surveys revealing the swiftest expansion in private sector activity since May 2023. This uptick is primarily attributed to the robust growth witnessed in the services sector.
Revised figures from the Eurozone Composite Purchasing Managers’ Index (PMI) for March indicate a significant improvement, with the index climbing to 50.3, surpassing the initial estimate of 49.9 and outperforming February’s reading of 49.2, signaling a shift towards expansionary conditions.
Despite this overall positive trajectory, a distinct divergence persists between the services and manufacturing sectors. While the services PMI surged to 51.5, reflecting growth, the manufacturing PMI remained entrenched in contraction territory at 46.1, underscoring ongoing challenges in the manufacturing landscape.
The upbeat sentiment extends to the employment front, with the service sector witnessing a thirty-eighth consecutive month of job gains. Moreover, a notable deceleration in service sector input cost inflation to an eight-month low hints at easing price pressures, fostering optimism among businesses.
This optimistic outlook resonates across various Eurozone nations, with Spain and Italy leading the charge in service sector expansion, reaching 11-month highs in their Composite PMI Output Index. Despite France and Germany showing signs of improvement, they continue to grapple with contraction, albeit at a reduced pace.
While the European stock market has enjoyed a sustained rally, propelled by positive economic indicators, caution looms amid escalating oil prices. Brent crude’s ascent to $90 per barrel poses a potential threat to inflation levels and corporate profit margins, potentially impacting the ECB’s interest rate decisions and the sustainability of the stock market rally.
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