Eurozone: Export weakness impacting domestic economy – ABN AMRO


Nick Kounis, head of financial markets research at ABN AMRO, points out that two bellwether business surveys – the PMIs and Germany’s Ifo – provided mixed news about the eurozone economy in May.

Key Quotes

“To start with the good news, it looks as if manufacturing and exports are bottoming out, following the sharp deterioration in momentum over the last few months. The bad news is that there are signs that the weakness in external sector is having an adverse impact on the domestic economy.”

“The eurozone composite PMI edged up to 51.6 in May from 51.5 in April, a level consistent with economy stuck in sluggish growth territory (GDP growth in the 0.1-0.2% region).  This supports our views that the acceleration in the official GDP growth data seen in Q1 is unlikely to be sustained.”

“The bad news is that the service sector PMI dropped (to 52.5 in May from 52.8 in April), while the slowdown in new business in that sector fell more noticeably (51.6 from 52.9).”

“Germany’s Ifo business climate indicator seemed to confirm these trends. The overall indicator dropped (to 97.9 from 99.2), driven by a sharp fall in current conditions, though the expectations index – a better indicator for GDP growth – stabilised. The sector breakdown showed manufacturing stable at low levels, but the services index fell to the lowest level since November 2014.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD rises above 1.1200 amid some USD weakness

EUR/USD is trading above 1.1200, recovering some of the losses. Earlier, ECB officials expressed concern about global growth President Draghi speaks later. Tension is rising toward the Fed decision.

EUR/USD News

GBP/USD pressured below 1.2600, Conservative contest in focus

GBP/USD is trading below 1.2600, consolidating the losses seen on Friday after US retail sales beat expectations. The Conservative contest is heating up ahead of tomorrow's second vote.

GBP/USD News

USD/JPY: wait-and-see continues ahead of Fed

The dollar consolidates its gains against most rival, and scarce data exacerbates the quietness. USD/JPY bullish above 108.90, bearish below 108.10.

USD/JPY News

Gold: Flirting with daily lows, around 200-hour SMA

A follow-through selling below 200-hour SMA will reinforce the negative outlook and accelerate the slide towards 38.2% Fibo. level support near the $1325 region ahead of Wednesday’s FOMC policy update.

Gold News

Gold: Signs of bullish exhaustion ahead of the Fed

Gold's rally seems to have run its course with signs of bullish exhaustion emerging on technical charts ahead of Wednesday's FOMC (Federal Open Market Committee) rate decision.

Read more

Majors

Cryptocurrencies

Signatures