Today, the focus in the euro zone is on the PMI sectors as expectations are showing that the contraction in the manufacturing and service sectors are going to expand further, which supports the fact that the worst of this global recession is over.
In our calendars today; PMI manufacturing for the month of November advanced reading is scheduled to be released with projections showing that it will climb to 51.2 from 50.7. Since the manufacturing sector is growing further, it is providing us with proof that government interventions are helping to stimulate economic conditions in the zone.
PMI services for November as well as the advanced reading are speculated to rise to 52.8 from the previous 52.6; while the PMI composite for the same time period will improve to 53.3 from 53.0.
Since we are seeing these sectors enhance it is providing us with evidence that production output is easing its slide, since these sectors are presently reaching out for recovery, despite of the rigid lending system and the instability in the financial instability. When these sectors continue to improve it will help end the worst economic growth in the zone since World War II.
If the industrial data released show that sectors are showing more enhancement, then this gives evidence that the ECB non-standard measures of buying 60 billion euro-dominated bonds are stimulating economic growth in the euro zone.
In the euro zone, their main focus is to boost economic growth especially since exports have been negatively affected from the ongoing recession in different regions around the world that led to dampened demand. As the central bank is buying bonds, is providing the markets with liquidity which would help the 16-nation area prosper especially as they continue to contract.
Now, turning to the 16-nation region biggest economy, Germany is also going to release its PMI manufacturing for the month of November advanced reading, which is forecasted to come in at 51.5 from 51.0. The manufacturing sector is one of the main engines for economic growth in Germany, especially since they have a huge automobile industry.
Also, PMI services in Germany will be released at 51.0 from the previous 50.7, here we continue to witness that the last stimulus package of 85.0 billion euros, implemented by the German government, is definitely helping the current economic scenario as sectors are slightly able to access funds.
The European stock market on Friday marked their first weekly fall since October; on worries that the stock market incline has outpaced the outlook for profits, while there are fears that when central banks exit stimulus measures, the economies' growth will continue to weaken; we see that the DJ Euro Stoxx 50 dipped 27.23 or 0.95% to 2833.06 points; CAC 40 fell 30.86 points or 0.82% to 3729.36 points; while the DAX slipped 39.03 points or 0.68% to 5663.15 points.
