Eurozone flash Composite PMI ticks down to 52.4 in November vs. 52.5 estimates

Eurozone Composite PMI drops to 52.4 in November, misses estimates and October's final reading of 52.5, according to the HCOB report.

The Manufacturing PMI falls below the neutral mark of 50.0, to 49.7. Economists expected the Manufacturing PMI to rise to 50.2 from 50.0 in October. The Services PMI rises slightly higher to 53.1 vs. estimates and the prior reading of 53.0.

“For months the manufacturing sector of the eurozone has been marooned in a no-man’s land of directionlessness. Production has picked up slightly since March of this year, but the overall situation has not improved during this period. Companies continue to face weak demand, which is reflected in a slight decline in new orders. In this environment, companies have reduced their inventories of both intermediate goods and finished goods even more sharply than in the previous month, meaning that the inventory cycle continues to show no signs of turning upward. We are still several months, and possibly even several quarters, away from sustained expansion in the manufacturing sector," Dr. Cyrus de la Rubia, Chief Economist at HCOB, said.

Market reaction

EUR/USD faces selling pressure after the flash Eurozone HCOB PMI data release. The major currency pair gives back some of its early gains and drops to near 1.1535. Still, the pair remains marginally higher than Thursday's closing price.

This section was published at 09:04 GMT after the release of the German HCOB PMI data for November

According to flash estimates, the German Composite PMI fell at a faster-than-expected pace to 52.1 in November, but remained comfortably above the neutral mark of 50.0. Economists expected the Composite PMI to come in lower at 53.7 from 53.9 in October.

The overall private-sector activity growth was dragged down by a slowdown in both manufacturing and the Services PMI.

Manufacturing PMI declined at a surprisingly faster pace to 48.4, against estimates of 49.8 and the prior release of 49.6. The Services PMI expanded at a moderate pace to 52.7.

“These figures are a major setback for Germany. In the manufacturing sector, the headline PMI has fallen deeper into contraction territory and now signals a slowdown in this part of the economy. Although production is slightly higher than in the previous month, new orders have now declined sharply after broadly stabilising in October. At least there is still growth in the service sector, but hopes that the rate of expansion would pick up speed here have vanished into thin air with the marked decline in the index. Overall, the German economy is limping towards marginal growth at best in the fourth quarter," Dr. Cyrus de la Rubia, Chief Economist at HCOB, said.

Market reaction

EUR/USD turns slightly volatile around 1.1550 after the German HCOB PMI data release.

This section was published at 06:49 GMT as a preview of the German and Eurozone HCOB PMI data for November

HCOB German/ Eurozone flash PMIs Overview

Germany and the Eurozone have the preliminary Purchasing Managers’ Index (PMI) data for November to be released by S&P Global and Hamburg Commercial Bank (HCOB) on Friday, later this session at 08:30 and 09:00 GMT, respectively.

HCOB German Composite PMI is expected to inch lower to 53.7 in November, from 53.9 previously. Meanwhile, Manufacturing PMI may tick up to 49.8 from 49.6, while Services PMI is expected to ease to 53.9 from October’s 54.6.

HCOB Eurozone Composite PMI is expected to hold steady at 52.5 in November. Meanwhile, Manufacturing PMI is anticipated to climb to 50.2 from 50.0 previously, while the Services PMI is expected to remain consistent at 53.0 in November.

How could HCOB German/Eurozone flash PMIs affect EUR/USD?

The Euro (EUR) may maintain its position if HCOB Manufacturing PMIs come as expected. Any surge in data could strengthen the cautious sentiment surrounding the near-term European Central Bank’s (ECB) monetary policy outlook. The ECB is widely expected to keep rates unchanged through the end of 2026, with inflation hovering near its 2% target, stable economic growth, and unemployment at record lows. Traders will shift their focus toward the US S&P Global PMI data later in the North American session.

The EUR/USD pair holds gains as the US Dollar (USD) eases after September jobs data boosted expectations of a Fed rate cut in December. The CME FedWatch Tool suggests that financial markets are now pricing in a 36% chance that the Fed will cut its benchmark overnight borrowing rate by 25 basis points (bps) at its December meeting, up from 30% probability that markets priced a day ago.

Technically, the EUR/USD pair trades higher near 1.1540, targeting the immediate barrier at the crucial level of 1.1550, followed by the nine-day Exponential Moving Average (EMA) at 1.1560. Further upwards would support the pair to test the psychological level of 1.1600, followed by the 50-day EMA at 1.1609 and a monthly high of 1.1655. On the downside, the initial support lies at the psychological level of 1.1400, followed by the three-month low of 1.1468, followed by the five-month low of 1.1391.