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.

 

Tuesday brought German and Spanish Unemployment Change data as well as Eurozone Unemployment rate figures. Germany’s unemployment rate unexpectedly fell to a record low in January, in a sign that economic sentiment in Europe’s largest economy is withstanding the tumult in global markets. The jobless rate fell to 6.2%, the lowest level since German reunification, from 6.3%, data from the Federal Labor Agency in Nuremberg showed on Tuesday. The number of people out of work declined by a seasonally adjusted 20,000 to 2.73 million. Economists predicted a drop of 8,000. “The good development of the job market has continued at the beginning of the year,” Frank-Juergen Weise, president of the labor agency, said in a statement.

 

The number of unemployed people in Spain rose for the first time in three months in January, renewing concerns over the health of the euro zone’s fourth largest economy, official data showed on Tuesday. In a report, Spain’s Employment Ministry said the number of unemployed people increased by a seasonally adjusted 57,200 last month, below expectations for a gain of 71,200. The number of unemployed people declined by 55,800 in December.

 

The euro area (EA19) seasonally-adjusted unemployment rate was 10.4% in December 2015, down from 10.5% in November 2015, and from 11.4% in December 2014. Analysts were predicting no change. This is the lowest rate recorded in the euro area since September 2011. The EU28 unemployment rate was 9.0% in December 2015, stable compared to November 2015, and down from 9.9% in December 2014. This is the lowest rate recorded in the EU28 since June 2009.

 

From Eurozone, on Wednesday, Spanish and Italian Services PMI data was published. The headline seasonally adjusted Spanish Services PMI posted 54.6 in January, in line with market forecasts, remaining well above the 50.0 no-change mark and thereby signalling a further sharp rise in activity during the month. Services output has now increased in each of the past 27 months, although the rate of expansion slowed again at the start of the year and was the weakest since December 2014. At 53.6 in January, down from December’s 69month high of 55.3, the headline Italian Markit/ADACI Business Activity Index showed a solid but slower rise in service sector output at the start of 2016. Analysts were expecting smaller decrease to 54.2. Growth in business activity has now been recorded for 11 months in a row. 

 

This week markets will be looking at:

 

German Prelim GDP (Friday 8:00)

Flash GDP (Friday 11:00)