Eurozone: PMI and ECB minutes - Danske Bank

According to analysts from Danske Bank, the two key events next week in the Eurozone will be the PMIs and the minutes from the latest meeting of the European Central Bank. They see that the fragile manufacturing sector is not about to recover and expect a
further plunge in PMIs.

Key Quotes: 

“In the euro area the most important data items next week are the PMI prints from Germany and the euro area on Thursday. In July, the already fragile euro area manufacturing sector continued to plunge to 46.5 (a 6.5 year low) while the service sector held broadly steady at 53.2. Weak external demand and geopolitical risks still haunt the manufacturing sector while domestic demand underpins the service sector, albeit companies have become more cautious about investment and also started to reassess staff levels. Since none of these factors have faded since July, but actually turned worse, we expect the manufacturing PMI’s to continue to fall to 46.2 and see scope for a small deterioration in the service sector print to 52.9.”

“The ECB minutes on Thursday will also gain attention. The discussion of the new policy measures will be scrutinised, but we doubt much flavour in terms of operational details will be revealed as ‘tasked committees’ are working on this.”