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EURO DOWN ON DISAPPOINTING PMI FIGURES ACROSS EUROPE

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euro falls on PMI figures

EURO DOWN ON DISAPPOINTING PMI FIGURES ACROSS EUROPE

Jan 2 2015, 10.52am GMT

STOCK.com

Only Germany and UK appear above the contraction level of 50 as PMI data is released for core European countries.

The sluggish and sometimes negative growth in Europe is in full focus as December figures are released for Europe’s major economies. Whilst Germany holds its PMI equal to expectations at 51.2, all other countries highlighted by today’s figures, bar Greece, have seen lower data compared to analysts’ forecasts. The Germany30 [DAX] saw losses on the news, retreating from 9889 to 9687.

Spanish Manufacturing PMI (Dec) is at 53.8, above contraction rates but down from forecasts of 54.7 and previous of    54.7               

Italian Manufacturing PMI (Dec) saw 48.4, down from optimistic expectations of 49.4 and previous of 49.0          

French Manufacturing PMI (Dec) is at 47.5, lower than the predicted 47.9 and previous 47.9       

German Manufacturing PMI (Dec) stays even with forecasts at 51.2

EUR Manufacturing PMI (Dec) sees a figure just above contraction at 50.6 but below the forecast and previous of 50.8

UK Manufacturing PMI (Dec) sees a slowing to 52.5, below expectations of 53.6 and previous of 53.5     

Greek Manufacturing PMI (Dec) is the only country to see a rise from 49.1, but the figure of 49.4 is still below growth levels

Under the threat of rising deflation throughout the Eurozone, Mario Draghi, president of the European Central Bank, announced in an interview with German newspaper Handelsblatt, that price stability will not be reached as the ECB intended. The euro is still sliding against a basket of currencies and the ECB response is to hint at more monetary easing. After asset purchase programmes instigated in 2014, Mr Draghi is keen to push more stimulus schemes, saying, “We are in technical preparations to alter the size, speed and composition of our measures at the beginning of 2015, should this become necessary, to react to a too-long period of low inflation. There’s unanimity in the ECB council on that.”

The euro saw a low level not reached since 2012 as Draghi made his statement and the confirmation of a snap election in Greece was announced. The Hellenic election may see the anti-bailout party Syriza, come into power and become a major risk to the ECB policy of austerity and debt balance. As the Eurozone and the central bank battle to keep any strength for the single currency on the world markets, data for the core countries was not able to placate.

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