Eurozone PPI Below Expectations as Recession Looms
THE TAKEAWAY: PPI rise in Eurozone smaller than expected -> Inflation concerns secondary to growth issues -> Euro strong on the day but fails to reach highs of last two days…
Data released today from the Eurozone showed producer price index softening from expectations and from previous measures, reflecting the ongoing growth issues in the beleaguered 17-nation bloc. PPI rose 0.1% in October versus the 0.2% predicted by economists and September’s 0.3%. On the year, the rise was 5.5% against the forecasted 5.6%. A breakdown of the data showed the weaker cost increases led by nations like Spain, France, and Germany.
European companies are under pressure to lower their prices as economic confidence plummets. Export slumps have caused people to have less spending money. Manufacturing PMIs from a number of key European nations released yesterday showed a hurt manufacturing sector, and top level European officials have warned of increased downside risks to the European economy. Numerous bodies and official have warned of impending recession.
The Euro was strong on the day following Wednesday’s collective central bank action, but as of this report had not broken above Wednesday’s highs.
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