Flash Germany Manufacturing PMI increased to 51.2 from 49.5 in November, what is a 2-month high, and above predicted incline to 50.4. However, Flash Germany Services PMI fell to 51.4 from 52.1 in November, what is a 17-month low. Analysts were anticipating raise to 52.6. The pace of expansion was in fact the weakest in one-and-a-half years and well below levels seen earlier in the year, when GDP grew 0.8%. The amount of new work placed with German companies declined again, suggesting that output growth may slow further at the start of next year, with the possibility of a downturn intensifying.
Flash Eurozone Services PMI Activity Index rose to 51.9 from 51.1 in November, beating slightly expectation on an incline to 51.5. Flash Eurozone Manufacturing PMI came to 50.8 from 50.1 in November, what is a 5-month high. Rates of expansion remained weak in both manufacturing and services. However, while growth of manufacturing output was unchanged on November, a slightly upturn in the pace of business activity growth was recorded in the service sector.
The ZEW Indicator of Economic Sentiment for Germany gained 23.4 points in December 2014. Increasing for the second consecutive time, the index now stands at 34.9 points (long-term average: 24.4 points), the highest reading since May 2014.
The sentiment indicator for the Eurozone has increased by 20.8 points to a reading of 31.8 points. The indicator for the current situation in the euro area decreased in December by 3.1 points to a value of minus 62.8 points.
From Eurozone, on Wednesday, only Final CPI data was released.Euro area annual inflation was 0.3% in November 20142, down from 0.4% in October and in line with prelim reading. A year earlier the rate was 0.9%. The largest upward impacts to euro area annual inflation came from restaurants & cafés (+0.09 percentage points), rents (+0.08 pp) and tobacco (+0.06 pp), while fuels for transport (-0.22 pp), telecommunications and heating oil (-0.09 pp each) had the biggest downward impacts.
German Ifo Business Climate figures were released from Eurozone on Thursday. The Ifo Business Climate Index for industry and trade in Germany rose to 105.5 points in December from 104.7 points last month, in line with market forecasts. Positive assessments of the current business situation remained unchanged. The outlook for the months ahead continued to brighten. Dropping oil prices and a falling euro exchange rate are seasonal gifts to the German economy.
European session on Friday was marked by Gfk German Consumer Climate figures. Development of consumer sentiment in Germany has been very robust in December, with the consumer climate maintaining its upward trend. Following a value of 8.7 points in December, the overall indicator is forecasting 9.0 points for January 2015. This was in line with market forecasts. Economic expectations and willingness to buy are improving, while income expectations have declined.
This week markets will be looking at:
French Consumer Spending (Tuesday 8:45)
