Spanish Manufacturing PMI up, Italian down

Monday, Feb 01 2016

Latest PMI data signalled a strong start to the year for Spanish manufacturing firms as new business rose at the fastest pace since February 2007, supporting sharper production growth. Higher workloads led to a pick-up in the rate of job creation, while positive expectations regarding future new orders encouraged firms to increase inventories. Meanwhile, falling raw material prices resulted in the sharpest decline in input costs since July 2009. The seasonally adjusted Markit Spain Purchasing Managers’ Index increased to 55.4 in January from 53.0 at the end of 2015, thereby signalling a stronger improvement in business conditions than in December. In fact, the health of the sector strengthened to the greatest extent since May last year.

The rate of growth of Italy’s manufacturing economy eased at the start of 2016, with output and new orders both rising more slowly compared with December. Nevertheless, businesses upheld a solid pace of job creation, meaning that employment in the sector has now risen for 13 months in a row. Elsewhere, January’s survey showed a sharp and accelerated drop in average input prices, which in turn contributed to a renewed decline in factory gate charges. At 53.2 in January, down from December’s 57month high of 55.6, the headline Markit/ADACI Italy Manufacturing Purchasing Managers’ Index pointed to the slowest improvement in the health of the goods-producing sector since September.

Euro is currently being traded around 1.0850 area. Pair is likely to find support around 1.08 handle and resistance above 1.09 level. Later today, in the US session, ISM Manufacturing PMI figures are scheduled for a release.

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