THE TAKEAWAY: Euro-zone composite PMI revised to a 35-month high -> Germany leads output -> Euro rises following the release
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The Euro has risen about thirty pips during the release of a series of services PMI’s for different countries around the Euro-zone, ending with the estimate of the July composite PMI for the entire Euro-zone being revised higher to 50.5 from 50.4, according to the final release.
The revision of the composite output index set a new 35-month high. The services PMI was revised higher to 49.8 for July and set a new 1.5 year high, but the index level was still below the 50.0 neutral level. Manufacturing production rose at the fastest pace since June 2011. All sector output growth saw the biggest rise in Germany, reported at 52.1 in July according to Markit. The pace of job losses across the Euro-zone was the weakest in 16 months.
Euro-zone has experienced six straight quarters of a recession, ending with 0.2% GDP decline in the first quarter of this year. Markit said today’s PMI’s give hope for a return to GDP expansion by the third quarter. “The euro area has experienced false dawns before, but the improvements in confidence and other forwardlooking indicators warrant at least some optimism for the outlook this time around,” said Markit Senior Economist Rob Dobson.
As gains were seen during the release of individual country PMI’s, little Euro movement was seen by the time it came for the release of the region’s composite PMI. EUR/USD is trading around 1.3300 at the time of this writing, and the pair may find resistance by a monthly high set recently at 1.3344.
Chart created by Benjamin Spier using Marketscope 2.0
-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to firstname.lastname@example.org .