THE TAKEAWAY: Euro-zone PMI for Manufacturing at 46.2 in November -> PMI indicate a continued recession in Q4 -> Euro trading steady
It has been 16 months of declining manufacturing activity in the Euro-zone, according to Markit’s final purchasing managers’ index for November. The PMI was reported at 46.2, which confirmed an earlier estimate, and was the highest manufacturing index result in eight months.
Ireland was the only country to not see a contraction in manufacturing activity, with a PMI at 52.4, according to Markit. The German PMI estimate was confirmed at 46.8, while France’s index was lowered to 44.5 from a previous estimate.
Manufacturing production contracted for the ninth successive month, but the rate of decline slowed. Companies are seeing lower levels of new work, and employment fell for the tenth straight month in manufacturing according to the PMI.
The Euro-zone economy contracted over the past two quarters because of the pressures of the Euro-zone debt crisis, and the PMI’s show the likelihood of the recession continuing into the fourth quarter. Markit Chief Economist Chris Williamson said, “With official data lagging the PMI, the rate of GDP decline is likely to have gathered pace markedly on the surprisingly modest 0.1% decline seen in the third quarter.”
The final PMI confirmed an earlier result and therefore did not have a significant impact on Euro trading in forex markets. EURUSD is currently trading around 1.3040, after setting a monthly high earlier today. Resistance could be provided by the 2-month high at 1.3139. Support could be provided at 1.3026, by the 76.4% retracement of the decline from October’s high to November’s low.
EURUSD 15-minute: December 3, 2012