EUR/USD unfazed even as German Preliminary Manufacturing PMI surprises positively with 45.7 in March
|- German Manufacturing PMI arrives at 45.7 in March vs. 39.6 expected.
- Services PMI in Germany drops to 34.5 in March vs. 42.3 expected.
The German manufacturing sector contraction quickened more-than-expected in March, the preliminary manufacturing activity report from IHS/Markit research showed this Tuesday.
The German Manufacturing purchasing managers index (PMI) arrived at 45.7 versus 39.6 expected and 48.0 previous, hitting a new two-month low.
Meanwhile, Services PMI hit a record low level of 34.5 in March as against previous months reading of 52.5 and 42.3 anticipated.
The IHS Markit Flash Germany Composite Output Index crashed to a 133-month low of 37.2 in March vs. 40.6 expectations.
Key comments from Phil Smith, Principal Economist at IHS Markit
“The unprecedented collapse in the PMI underscores how Germany is headed for recession, and a steep one at that. The March data are indicative of GDP falling at a quarterly rate of around 2%, and the escalation of measures to contain the virus outbreak mean we should be braced for the downturn to further intensify in the second quarter.“
“The service sector has so far borne the brunt of the government’s measures to stem the spread of COVID-19, with activity falling to the greatest extent in almost 23 years of data collection, and at a rate that already far surpasses anything seen even during the depths of the global financial crisis.”
FX implications
On mixed German PMI numbers, the EUR/USD pair showed little reaction and kept its range around 1.0835 region, up 1.10% on the day.
EUR/USD technical levels to watch
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