Eurozone: Stagnating PMIs – Nordea

Sandeep Kanihama FXStreet Contributor

Analysts at Nordea Markets explain that the Eurozone’s end-of-the-year PMIs confirm that the region is in a deep manufacturing recession, but still has a robust service sector.

Key Quotes

“The euro area composite PMI kept steady in December, just above the 50-mark at 50.6. This makes for a weak fourth quarter and implies a standstill in euro area growth.”

“The divergence between the manufacturing and service sectors continued, as the manufacturing PMI disappointed and fell to 45.9 while the services component slightly improved to 52.4. Weakness from the manufacturing sector is still rather contained and not spilling over to the service sector so far.”

“The manufacturing PMI in Germany surprised to the downside, and stood at 43.4, contrary to expectations of an improvement. Services PMI came in a bit higher than last month, at 52.0. Employment components are worrying, with especially manufacturing staff cuts worsening. Subdued new orders are keeping a lid on investment. Germany continues to be a drag on euro area growth.”

“In France both manufacturing and services components remained in expansionary territory. Growth continues to be mainly driven by the private service sector.The manufacturing PMI did fall however, and came out at 50.3, a good bit below consensus of 51.5. Services PMI on the other hand saw an uptick, albeit marginal, to 52.4.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

EUR/USD weakens as US jobs data trims Fed rate cut bets

The EUR/USD pair trades in negative territory for the third consecutive day near 1.1860 during the early European session on Thursday. Traders will keep an eye on the US weekly Initial Jobless Claims data. On Friday, the attention will shift to the US Consumer Price Index inflation report.

GBP/USD bullish outlook prevails above 1.3600, UK GDP data looms

The GBP/USD pair gains ground near 1.3635, snapping the two-day losing streak during the early European session on Thursday. The preliminary reading of UK Gross Domestic Product for the fourth quarter will be closely watched later on Thursday. The UK economy is estimated to grow 0.2% QoQ in Q4, versus 0.1% in Q1.

Gold remains on the defensive below two-week top; lacks bearish conviction amid mixed cues

Gold sticks to modest intraday losses through the Asian session on Thursday, though it lacks follow-through selling and remains close to a nearly two-week high, touched the previous day. The commodity currently trades above the $5,070 level, down just over 0.20% for the day, amid mixed cues.

UK GDP set to post weak growth as markets rise bets on March rate cut

Markets will be watching closely on Thursday, when the United Kingdom’s Office for National Statistics will release the advance estimate of Q4 Gross Domestic Product. If the data land in line with consensus, the UK economy would have continued to grow at an annualised pace of 1.2%, compared with 1.3% recorded the previous year.

The market trades the path not the past

The payroll number did not just beat. It reset the tone. 130,000 vs. 65,000 expected, with a 35,000 whisper. 79 of 80 economists leaning the wrong way. Unemployment and underemployment are edging lower. For all the statistical fog around birth-death adjustments and seasonal quirks, the core message was unmistakable. The labour market is not cracking.

Sonic Labs’ vertical integration fuels recovery in S token

Sonic, previously Fantom (FTM), is extending its recovery trade at $0.048 at the time of writing, after rebounding by over 12% the previous day. The recovery thesis’ strengths lie in the optimism surrounding Sonic Labs’ Wednesday announcement to shift to a vertically integrated model, aimed at boosting S token utility.