fundamental alert

Euro-Zone Manufacturing and Services Contract for Seven Consecutive Months as Demands Falter

Tuesday, 16 December 2008 08:02:42 GMT  |  Geng Chen, DailyFX Research

Service-based activity in Euro-Zone contracted for the seventh consecutive month in December as the advanced PMI reading slipped to 42.0 from 42.5. In addition, the manufacturing PMI dropped to 34.5 from 35.6, and led the PMI composite to reach its lowest level since recordkeeping began in 1998 as the index slipped to 38.3 from 38.9 in the previous month. A deeper look into the report showed that new orders declined to 27.4 from 28.8, while the employment component weakened to 39.1 from 41.0. The latter suggests the acceleration in the pace of job cuts, which will add to growth concerns and weigh on consumption trends. Both the manufacturing and services readings were slightly better than expected, but still down from November and firmly below the 50 point no change mark, thus pointing to ongoing contraction in both the manufacturing and services sectors, suggesting that the Euro-Zone may contract at a faster pace in the fourth quarter, and economic activity may remain subdued well into the next year as growth prospects deteriorate.
EUR-USD recorded 1.3656 session lows, with profit taking accelerating in to the German and Euro-Zone PMI release.

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