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Talking Points

- The French, German and Euro-Zone PMIs all beat expectations, boosting the Euro.

- The data make a “tapering” of monetary stimulus by the ECB more likely.

- See the DailyFX Economic Calendar and see what live coverage for key event risk impacting FX markets is scheduled for the week on the DailyFX Webinar Calendar.

March purchasing managers’ indices (PMIs) for the Euro-Zone and for both of Continental Europe’s largest economies, Germany and France, all came in higher than forecast Friday, making it more likely that the European Central Bank will at some stage withdraw some of its monetary stimulus.

Whether that will be by raising interest rates or, more likely, by reducing its asset purchases, the data gave the Euro a boost in London trading against its major rivals – although it did ease back after its initial jump higher.

Chart: EUR/USD 5-Minute Timeframe (March 24, Intraday)

Strong Euro-Zone PMIs Beat Expectations, Boosting Euro

Chart by IG

The March composite PMI for the Euro-Zone, the headline figure, came in at 56.7, up from the previous 56.0, above the forecast 55.8 and well above the 50 line that separates expansion from contraction. That was a 71-month high despite the political uncertainty caused not just by Brexit and the economic policies of US President Donald Trump but also the upcoming elections in France and Germany.

“Euro-Zone economic growth gathered further momentum in Marchreaching a near six-year high,” noted IHS Markit, which calculates the figures. The survey also saw the best employment growth for almost a decade as both manufacturing and service-sector firms responded to surging order books.

Business optimism meanwhile hit a new peak, but price pressures also intensified to a near six-year high. The Markit Euro-Zone PMI rose to 56.7 in March, according to the preliminary ‘flash’ estimate (based on approximately 85% of final replies). Up from 56.0 in February, the latest reading was the highest since April 2011. The first quarter average of 55.7 is the highest since the first quarter of 2011,” it added.

--- Written by Martin Essex, Analyst and Editor

To contact Martin, email him at

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