THE TAKEAWAY: Euro-zone PMI for manufacturing for December revised lower to 46.1 -> PMI shows a tough 2013 for manufacturers -> Euro trading higher following US fiscal cliff deal
The Euro-zone manufacturing Purchasing Managers’ Index for December was revised lower from a previous estimate, thereby no longer setting a 9-month high, according to Markit. The PMI was lowered from 46.3 to 46.1, down from November’s 46.2 manufacturing activity survey result. A PMI below 50.0 indicates contracting industry activity, and Euro-zone manufacturing has seen declining activity since July 2011.
Every Euro-zone country showed declining manufacturing activity in December, except Ireland, where the PMI was reported at 51.4. Out of all the Euro members, Greece saw the worst PMI for manufacturing at 41.4.
Euro-zone manufacturing output declined for the tenth consecutive month according to Markit. New manufacturing export orders declined for the 18th straight month. Employment fell in the manufacturing industry for the 11th straight month, and was down in each Euro-zone country except for Ireland.
The European Central Bank has recently predicted that the Euro-zone economy will only begin a rebound well into 2013. Today’s PMI seems to support that prediction. Markit Chief Economist Chris Williamson said, “Manufacturers look to be in for another tough year in 2013, though prospects have brightened a little, as producers should benefit from signs of stronger demand in key export markets such as the US and China.”
Negative news about the Euro-zone economy is usually Euro-negative, but today’s release did not have a significant effect on the single currency. EURUSD remains about 90 points higher than today’s late open in forex markets, following news of a deal to avert the US fiscal cliff. However, resistance remains at the 9-month high of 1.3309, and support could be provided by a broken resistance around 1.3158.
EURUSD Daily: January 2, 2013