Eurozone manufacturing PMI ticked down - BBH

The research team at BBH notes that the Eurozone manufacturing PMI ticked down to 56.7 from 56.8 flash reading and 56.2 in March.  

Key Quotes

“It is a new multi-year high, helped by employment and order backlog.  The French and German readings were unchanged from the flash estimate.  Italy's reading of 56.2 was a little above expectations and above March's 55.7.  It is also a new multi-year high.  Spain's manufacturing PMI rose to 54.5 from 52.9.  It snapped a two-month decline.”

“However, the survey data has been running ahead of real sector performance.  Last week, the US, UK, and France reported Q1 17 GDP estimates and each was below expectations.  The eurozone reports its estimate tomorrow.  The Bloomberg median calls for a 0.5% increase, which would leave the year-over-year pace steady at 1.7%.  We note that despite the increase in the employment sub-component to its best level in six years, the region's overall unemployment rate in March disappointed by being unchanged at 9.5%.  That said, a year ago it was at 10.2%.”

“The euro continues to chop around in the upper half of its $1.0850-$1.0950 range.  A $1.10 strike, estimated at 1.4 bln euros, expires today and tomorrow the $1.0925 strike sees 1.0 bln euros roll-off.  Our reading of the near-term technicals does not rule out a move to $1.10 or even a bit through it.  However, the technical indicators are getting stretched.”