French and German PMI data shows weakness in Eurozone

Thursday, Apr 23 2015

PFrench Manufacturing PMI decreased to 48.4 in April. Analysts were expecting incline to 49.4. Output growth stuttered almost to a halt in April, signalling a continuation of the moribund economic environment in France. New business growth weakened despite a further marked fall in prices charged, highlighting the competitive challenge facing French companies.

Furthermore, French Services PMI declined to 50.8, missing forecasts on remaining unchanged at 52.4. Service providers’ business expectations improved to a 37-month high, although it remains difficult to see much justification for this optimism and sentiment remains historically low.

German Manufacturing PMI fell to 51.9, missing predictions on an incline to 53.1. The latest set of PMI results signalled a continuation of output growth in Germany’s private sector heading into the second quarter of 2015. Companies reported further, albeit slightly weaker, expansions of both output and new orders and also continued to increase their workforce numbers.

German Services PMI also declined to 53.7, below expectations on a raise to 54.5. Input costs meanwhile rose further during April, as low oil prices were more than offset by increased staff costs and the weak euro, which increased the price of some imported raw materials for manufacturers. Consequently, companies raised their charges to the greatest extent since January 2014.

Euro was pushed lower after the figures and is currently being traded around 1.0670 level. Pair is likely to find support around 1.0650 area and resistance above 1.0750 level. Later today, Eurozone PMI figures will be released.

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