THE TAKEAWAY: Service and Composite PMI’s for August revised lower -> Seven straight months of declining Euro-zone output -> Euro trading lower
The composite Euro-zone output was revised even lower in today’s revised Purchasing Manager’s Index by Markit Economics. The composite PMI was revised to 46.3 from a previous estimate of 46.6, and shows seven straight months of negative output, as indicated by an index result below 50.0.
The PMI for services was also revised lower to 47.2 from a previous estimate of 47.5 and is lower than last month’s 47.9 index result. The service sector business activity has been negative for 7 seven straight months.
Economic activity declined the most in Spain and Italy, while Germany and France saw modest downturns, and Ireland saw a rising output for the third straight month.
Markit’s Senior Economist Rob Dobson said today’s PMI results indicate further quarterly gross domestic product losses. “Sharp declines in new orders at manufacturers and service providers, plus further job losses, mean that there is little prospect of a sustained improvement in economic conditions over the near-term,” said Dobson.
The Euro declined following the PMI revision, continuing an earlier drop from yesterday’s close. In today’s session, EURUSD reversed last week’s rally and returned back towards 1.2500, where support could be provided. The pair has also broken through a week and a half long upward trend line following the PMI release.
EURUSD 15-minute: September 5, 2012
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