Eurozone: Lack of enthusiasm for the economy and the euro - Wells Fargo

Today Eurozone PMI reports triggered fears about a recession. According to analysts at Wells Fargo, the manufacturing has weakened considerably, but services (more relevant) have been more resilient. However, they find it hard to get excited about European prospects. 

Key Quotes: 

“Fears of a Eurozone recession are back in the headlines today after a series of disappointing PMI figures from the currency bloc. The March manufacturing PMI declined more than expected to 47.6, the lowest level since 2013.”

“The continued decline in the manufacturing PMI in the first three months of 2019 suggest the weakness in the hard data for the sector probably persisted in the first quarter. Fortunately, the Eurozone economy is primarily based on services, which account for roughly 75% of total value added in the economy, rather than manufacturing, which accounts for less than 20%. The services PMI for the overall Eurozone economy has been more resilient in recent months, recovering to 52.8 in February and edging only slightly lower in March to 52.7.”

“We find it hard to get excited about European economic prospects. Despite its relative resilience, the services PMI still remains low at just 52.7, while the composite PMI at 51.3 is consistent with GDP growth of just over 0.1% quarter-over-quarter.”

Our lack of enthusiasm for the Eurozone economy extends to the euro, as we currently look for the euro to remain essentially flat-line over the next few months. We still look for some modest euro gains by year-end and into 2020, but that view is predicated on the Eurozone economy avoiding recession and the European Central Bank eventually normalizing interest rates.”

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 steady around 1.1240 in ultra-thin holiday's trading

The EUR/USD pair bounced some 20 pips from its weekly low during the Asian session, now mute around 1.1240 with most market's off today. Softer-than-expected US housing data passed unnoticed.

EUR/USD News

GBP/USD battling around 1.3000

The GBP/USD pair is heading nowhere fast after bottoming for the week at 1.2978, amid lack of progress in Brexit negotiations.  Encouraging UK data failed to trigger Pound's demand.

GBP/USD News

USD/JPY: On track to close in the middle of its 50-pip weekly range below 112

The USD/JPY pair remains frozen below the 112 handle in the NA session and there is no reason for it to make a meaningful move as investors are already enjoying the Easter holiday.

USD/JPY News

The Tale of the Prosperous Consumer-US Retail Sales

American consumers asserted the right to spend in a grand fashion in March boosting retail sales to the fastest expansion in 18 months as the booming job market put the shutdown marked holiday season to rest.

Read more

Gold Forecast: Eyes 8-month rising trendline after weakest weekly close since December

The troy ounce of the precious metal lost around $17 this week and now looks to record its lowest weekly close since the end of December near $1275.

Gold News

Majors

Cryptocurrencies

Signatures