Home » Currency Note » Currency Note » Currency Note EUR » EUR: all PMI readings in Germany and eurozone disappoint

It was a busy day for the eurozone on Friday, with composite, manufacturing and services PMI from Germany and the eurozone on the schedule. Unfortunately, every single one of the releases came in below expectations, with some hitting lows not seen for some time. The eurozone’s composite PMI dropped to 52.4 in November from 53.1 in October, below market expectations of 53. It is the weakest pace of expansion in the private sector for four years.

Manufacturing PMI in Germany fell to 51.6 in November from 52.2 the month before and below the 52.2 expected. It is the weakest pace of expansion in the manufacturing sector since March 2016, with output growth easing to its lowest mark for more than five years. Composite and services PMI in Germany fell to 52.2 and 53.3 respectively, against expectations of 53.2 and 54.5. Manufacturing companies suffered the most, which appears to suggest that ongoing trade disputes triggered by the Trump administration are beginning to have an effect.

German GDP growth rate figures for the third quarter of 2018 were also release, with the quarterly and annual readings both coming in as expected. However, the release did show that the economy shrank in the three months to September 2018 – the first quarterly contraction since 2015. The euro weakened against the dollar in response and would probably have fallen further against sterling, were it not for continuing Brexit uncertainty in the UK.

Today we will see the Ifo business climate for November, which is expected to dip a little to 102.3 from 102.8 the previous month. There are several key releases throughout the week, but on Friday we will see unemployment and inflation rates for the eurozone.

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