Research Team at BBH points out that strong Eurozone flash PMI readings were reported for March as the composite reading was 56.7 vs. 55.8 expected.
Key Quotes
“Looking at the breakdown, the manufacturing PMI was 56.2 vs. 55.3 expected, while the services PMI was 56.5 vs. 55.3 expected. The firmer than expected data will feed into the notion that the ECB is moving a step closer to ending its unconventional policies.”
“Looking at the country breakdown, German composite PMI was 57.0vs. 56.0 expected. Of this, German manufacturing PMI was 58.3 vs. 56.5 expected, while the services PMI was 55.6 vs. 54.5 expected. Likewise, French composite was 57.6 vs. 55.8 expected. Here, French manufacturing PMI was 53.4 vs. 52.4 expected, while the services PMI was 58.5 vs. 56.1 expected.”
“The data helped propel the euro off the lows and back above $1.08. A close above yesterday’s high near $1.0805 would be an outside up day, signaling further gains for the euro. The 2-year US-German differential is currently around 200 bp, the lowest since mid-February and due not only to lower US rates, but to higher (less negative) German rates. Until this widens out again, it will be hard for the dollar to gain much traction against the euro.”
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