EUR/USD Little Changed After Weaker February Markit Euro-Zone PMIs
- Flash Eurozone Manufacturing PMI at 51.0, 12-month low
- Flash Eurozone Services PMI at 53.0, below expectations
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The Euro was little changed (at the time this report was written) versus the US Dollar after today’s Flash Markit Eurozone PMI printed disappointing figures. The Eurozone PMI Composite Index came at 52.7, below the expected 53.3 print and the prior 53.6 figure. The Services PMI Activity Index dropped to 53.0, below the 53.6 prior reading, and the expected reading of 53.4. Manufacturing PMI declined to 51.0, below the prior 52.3 print and the expected 52.0 figure, signaling a 12-month low.
The Euro-Zone reading came after earlier today the France and German Markit PMI figures generally missed expectations excluding a pickup in services in the German report. France saw a return to contraction as business activity fell for the first time since January of last year in both manufacturing and services. A reading of less than 50 indicates a contraction of activity, above 50 points to an expansion, and an index of50 says that no change has occurred.
Markit remarked that the slowing in the rate of output expansion reflected a waning in growth of new orders for a third successive month, resulting in the smallest rise in new business for 12 months. Furthermore Markit said that the Manufacturing figure marked the smallest increase since December 2014, moving closer to stagnation. The report mentioned that deflationary pressures intensified, with average prices charged by companies for goods and services falling at the steepest rate for a year as firms competed to boost sales. Perhaps most interestingly, Markit commented that the disappointing PMI survey data for February greatly increase the odds of more aggressive stimulus from the ECB in March.
As was mentioned recently by DailyFX currency strategist Christopher Vecchio, the Euro has been seemingly oblivious to developments at home as further emphasis is being placed by traders on developments abroad. This could potentially explain the weak response to today’s figures. With that being said, it seems that Euro-Zone data in recent weeks may help the bear case gather momentum as it seems gains by the Euro ahead of the ECB’s March meeting look difficult to sustain.
EUR/USD 5 Minute Chart: February 22, 2016 (Intraday)
--- Written by Oded Shimoni, DailyFX Research
To contact Oded, please email firstname.lastname@example.org
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.