Small wins should be celebrated. A small uptick in eurozone's August PMIs from 51.5 to 51.8 is somewhat a relief today as analysts had expected a further slide. If nothing else, at least it indicates that the economy is unlikely to have slipped into negative growth halfway through the third quarter.

As recession concerns dominate headlines and downside risks are still increasing, small wins should be celebrated. The small increase in August PMIs is a small win, but at least it indicates that the eurozone economy is unlikely to have slipped into negative growth halfway through the third quarter. The picture remains more or less unchanged, with slow growth thanks to a sluggish manufacturing sector and service sector strength that keeps the economy growing.

While the manufacturing sector continues to contract according to the survey, the contraction did become somewhat softer as the output index increased from 46.9 to 47.8 in August. France remains a positive exception for the moment with manufacturing output still growing, but overall the manufacturing sector continues to be the Achilles heel of the region. New orders continue to be dampened by weak demand from abroad.

Concerns about manufacturing weakness spreading to the service sector haven't seemed to materialise in August. The service sector saw its PMI increase from 53.2 to 53.4, indicating that the divergence between the two sectors continues well into the third quarter. As hiring seems to slow, the outlook for the service sector does seem to look ess bright.

The August PMI confirmed an ongoing slow-growth environment. The glass will be half-full for those that are concerned about negative output growth in the third quarter. For those that see the downside risks for the winter months increasing though, the confirmation of the slow pace of growth is enough to remain concerned.

 

Read the original article: A small win for the Eurozone as PMI ticks up

Content disclaimer: This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more here: https://think.ing.com/content-disclaimer/

Recommended Content


Recommended Content

Editors’ Picks

USD/JPY pops and drops on BoJ's expected hold

USD/JPY pops and drops on BoJ's expected hold

USD/JPY reverses a knee-jerk spike to 142.80 and returns to the red below 142.50 after the Bank of Japan announced on Friday that it maintained the short-term rate target in the range of 0.15%-0.25%, as widely expected. Governor Ueda's press conference is next in focus.  

USD/JPY News
AUD/USD bears attack 0.6800 amid PBOC's status-quo, cautious mood

AUD/USD bears attack 0.6800 amid PBOC's status-quo, cautious mood

AUD/USD attacks 0.6800 in Friday's Asian trading, extending its gradual retreat after the PBOC unexpectedly left mortgage lending rates unchanged in September. A cautious market mood also adds to the weight on the Aussie. Fedspeak eyed. 

AUD/USD News
Gold consolidates near record high, bullish potential seems intact

Gold consolidates near record high, bullish potential seems intact

Gold price regained positive traction on Thursday and rallied back closer to the all-time peak touched the previous day in reaction to the Federal Reserve's decision to start the policy easing cycle with an oversized rate cut.

Gold News
Ethereum rallies over 6% following decision to split Pectra upgrade into two phases

Ethereum rallies over 6% following decision to split Pectra upgrade into two phases

In its Consensus Layer Call on Thursday, Ethereum developers decided to split the upcoming Pectra upgrade into two batches. The decision follows concerns about potential risks in shipping the previously approved series of Ethereum improvement proposals.

Read more
Bank of Japan set to keep rates on hold after July’s hike shocked markets

Bank of Japan set to keep rates on hold after July’s hike shocked markets

The Bank of Japan is expected to keep its short-term interest rate target between 0.15% and 0.25% on Friday, following the conclusion of its two-day monetary policy review. The decision is set to be announced during the early Asian session. 

Read more
Moneta Markets review 2024: All you need to know

Moneta Markets review 2024: All you need to know

VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.

Read More

Majors

Cryptocurrencies

Signatures