Eurozone: Improved momentum in the economy at the beginning of Q4 – RBC CM
|Research Team at RBC Capital Markets, suggests that yesterday’s ‘flash’ October PMI readings suggested improved momentum in the euro area economy at the beginning of Q4.
Key Quotes
“In particular, the weakness in the German services sector halted, propelling the euro area composite PMI to 53.7, its highest level in almost a year. That was slightly ahead of the Q2 and Q3 averages of 53.1 and 52.9, which were in turn consistent with growth of 0.3%-0.4% q/q. Improvements in the forward leaning new orders sub-index and backlogs of new work increasing, suggests that that renewed momentum should continue into November.
There was a very strong improvement in the October composite PMI for Germany, which rose to 55.1 from 52.8 in September thanks to stronger readings for both the services and manufacturing sectors. Though the French composite weakened slightly there was better news for the manufacturing PMI which jumped to 51.3 from 49.7 as output expended for the first time since February.
The PMIs also suggested some emerging signals of rising price pressures with input prices rising at their fastest pace since June last year and output prices at their fastest pace for almost five years.”
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