German PMIs Higher Than Forecast, Strengthening Euro
The German purchasing managers' indices for March were far higher than expected, making a so-called tapering of Euro-Zone monetary stimulus by the European Central Bank more likely and strengthening the Euro.
The PMI for the German manufacturing sector this month was 58.3, well above both the expected 56.5 and February's 56.8. For the services sector it was 55.6, above the predicted 54.5 and the prior month's 54.4. The composite PMI was 57.0 rather than the 56.0 forecast and the previous 56.1.
All the numbers were well above the 50 level that separates expansion from contraction and, as forward-looking indicators, suggest that economic growth in Germany is likely to have accelerated in the first quarter of the year.
That's despite the market uncertainty caused by Brexit, US President Donald Trump's economic policies and the upcoming elections in France and Germany.
"Germany posted the fastest rate of private-sector output growth in nearly six years at the end of the first quarter of 2017," noted IHS Markit, which compiles the data. "The March PMI survey data also signalled a near-record rate of employment growth and the strongest cost pressures for nearly six years. The Markit Flash Germany Composite Output Index rose for the second month running from 56.1 in February to 57.0, the highest since May 2011 and signalling marked economic growth in the Euro-Zone’s largest economy. The current sequence of continuous expansion now stretches to 47 months," it added.
In response to the data, EUR/USD moved sharply higher and the Euro climbed too against other major currencies.
