Eurozone Flash Manufacturing PMI drops to 45.6 in September, EUR/USD keeps weekly lows

The Eurozone manufacturing sector activity continues to deteriorate further and remains in the contraction territory this month, the latest manufacturing activity survey from IHS/Markit research showed.

The Eurozone manufacturing purchasing managers index (PMI) came in at 83-month lows of 45.6 in September vs. 47.3 expected and 47.0 last while the services PMI dropped to eight-month lows of 52.0 vs. 53.3 expected and 53.5 last.

The IHS Markit Eurozone PMI Composite fell from 51.9 in August to 50.4 in September, hitting fresh 75-month troughs.

Comments from Chris Williamson, Chief Business Economist at IHS Markit

“The eurozone economy is close to stalling as a deepening manufacturing downturn shows further signs of spreading to the services sector.”

“The survey data indicate that GDP looks set to rise by just 0.1% in the third quarter, with momentum weakening as the quarter closed.”

“The goods-producing sector is going from bad to worse, suffering its steepest downturn since 2012, but a further worrying trend is the broadening-out of the malaise to the service sector, where the rate of growth has now slowed to one of the weakest since 2014.”

“The details of the survey suggest the risks are tilted towards the economy contracting in the coming months. Most vividly, new orders for goods and services are already falling at the fastest rate since mid-2013, suggesting firms will increasingly look to reduce output unless demand revives.”

The EUR/USD pair meanders nearly weekly lows of 1.0965 on poor Euro area Flash Manufacturing PMIs, as the bears now target the YTD lows of 1.0926 heading into ECB President Draghi’s testimony, due later today at 1300 GMT.