Germany’s flash Manufacturing PMI unexpectedly rises faster to 54.1 vs. 52.0 estimates

Sagar Dua FXStreet

German flash HCOB Composite PMI rises moderately to 51.0 in August as the services sector activity contracts again. The Composite PMI was expected to remain steady at 51.3.

The Services PMI arrives at 48.5, lower than 49.8 in July. The data was expected to return to the expansion trajectory at 50.1. A figure below 50.0 is considered a contraction in business activity.

Meanwhile, activities in the manufacturing sector remained robust. The Manufacturing PMI unexpectedly rose at a faster pace to 54.1 from the previous reading of 52.2. The manufacturing sector activity was expected to expand, but only moderately, to 52.0.

Market reaction

A mild positive response was seen in the Euro (EUR) after the German preliminary HCOB PMI data release. As of writing, EUR/USD trades 0.15% higher to near 1.1695.

Economic Indicator

HCOB Manufacturing PMI

The Manufacturing Purchasing Managers Index (PMI), released on a monthly basis by S&P Global and Hamburg Commercial Bank (HCOB), is a leading indicator gauging business activity in Germany’s manufacturing sector. The data is derived from surveys of senior executives at private-sector companies. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. As Europe’s main manufacturing hub, German PMI data can also be a bellwether of the sector’s health in the broader continent. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the manufacturing economy is generally expanding, a bullish sign for the Euro (EUR). Meanwhile, a reading below 50 signals that activity among goods producers is generally declining, which is seen as bearish for EUR.

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