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Talking Points:

- Flash Eurozone Manufacturing PMI at 51.5 vs 51.9 expected

- Flash Eurozone Composite PMI at 52.9, 16-month low

- Euro traded slightly lower versus other major currencies

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The Euro traded slightly lower versus other major currencies (at the time this report was written) after today’s Flash Markit Eurozone PMIs edged down. The Eurozone PMI Composite Index came at 52.9, below the expected 53.2 print with a 53.0 prior figure, and marked a 16-month low. The Services PMI Activity Index was unchanged at 53.1, but was below the expected 53.2 print. Manufacturing PMI declined to 51.5, below the prior 51.7 print and the expected 51.9 figure.

The Euro-Zone reading came after earlier today the German Markit PMI figures exceeded expectations in all the components, while the France figures showed a rise but manufacturing missed expectations. Accelerations in France and Germany were offset by cooling of the rate of expansion outside of the big-two nations to a 17- month low.

A reading of less than 50 indicates a contraction of activity, above 50 points to an expansion, and an index of 50 says that no change has occurred.

Looking into the report, Markit remarked that the figures reinforced the picture of subdued growth of Euro-Zone economic activity, with few signs of any imminent improvement. The last readings suggest that economic growth has slowed in Q2, signaling GDP growth of only 0.3%, despite various ECB stimulus ‘bazookas’, Markit said.

Taking Markit’s remarks into consideration, this might explain the slight negative reaction in the Euro, which traded lower versus most other major currencies.

The DailyFX Speculative Sentiment Index (SSI) is showing that about 49.5% of FXCM’s traders are long the EUR/USD at the time of writing. The SSI is mainly used as a contrarian indicator.

You can find more info about the DailyFX SSI indicator here

EURUSD 5-Minute Chart: May 23, 2016

EUR/USD Slightly Lower After Soft Markit Euro-Zone PMI Figures

--- Written by Oded Shimoni, DailyFX Research