Contraction and expansion highlight the economies of 2 of the core EU countries. Markets saw a jump on EUR/USD to 1.2640 on the German figures.
German Flash Manufacturing PMI, previous 49.9, forecast 49.6, actual 51.8.
With expansion on every German reading, the positive figure could be seen as a correction from September’s negative figure of 50.3, taking German manufacturing back to its 6 month trend around the 52 mark. However, investor concern is down as companies such as Daimler, operating through Mercedes Benz, recovered their shares from an Oct 10th low of 56.0 to present day mark of 59.78.
French Flash Manufacturing PMI previous 48.8, forecast at 48.6, actual 47.3.
As opposed to German figures, contraction in the French manufacturing industry shows a struggling economy. July 2011 was the last time that the French figures rose above the 50.0 mark for a fluid amount of time, indicating industry expansion. PMI rose above the 50.0 mark briefly in March and April of this year only to fall again. French manufacturing has not however come close to its 2009 recession levels of 35.4.
ECB balance in the euro zone
Slow burning reform in Germany has a positive effect on the euro zone with the ECB putting credit easing, bond buying, structural reform, and fiscal expansion all on the ECB table. The European Central Bank is looking to reform periphery countries and support from strong economies, to lead to balance in the euro zone.