THE TAKEAWAY: German output composite index reported at 49.7 -> PMI’s show stabilization in the private sector -> Euro trading lower today
German services industry activity returned to positive in September according to an initial Purchasing Managers’ Index released by Markit. The PMI for services was reported at 50.6, beating expectations for 48.5 and higher than August’s 48.3 result. The PMI for manufacturing also unexpectedly rose to 47.3, better than the expected 45.2 survey result.
The composite index for industry output showed stabilization in the private sector, with a 49.7 index result, the highest in six months. Any index above 50.0 signals expansion in that sector. However, the rise in service business activity was achieved in part by completion of on-hand work, as German backlogs decreased for the fifteenth straight month. Although, the rate of decrease in new work orders slowed.
Markit Senior Economist Tim Moore said, “Germany managed to shake off the summertime blues in September, with renewed services growth helping to stabilise private sector output as a whole.”
However, the Euro did not significantly react to the better than expected German PMI’s, but declines following the French PMI estimate were erased. Major risk correlated currencies are all down against safe-have correlated assets this session, including the Euro against the US Dollar, following lower sentiments about a Euro recovery and weak data from the Asia session. EURUSD fell below the key 1.3000 line which has provided support for the past week, and could now provide resistance.
EURUSD 15-minute: September 20, 2012
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