- All European PMIs beat easily forecasts across the board
- Services sector catches up on its previous feebler months
- EURUSD has failed to break 1.2000 after the solid releases
The September PMIs turned out to be by far better than expected boding well for GDP growth in the third quarter. To be precise, there was no a release below estimations while the services sector caught up on its previous weaker months. As a result, the EURUSD has already neared 1.2000 and is just a shy of the pre-FED levels.
Let’s begin with the manufacturing sector which was already sturdy before today’s releases. The results are as follows:
- France: 56 vs 55.5 expected
- Germany: 60.6 vs 59
- Euro Area: 58.2 vs 57.2
To sum up, all metrics from the most pivotal areas beat forecasts quite easily. Needless to say that a burst of exuberance came in despite a surge seen in the single currency which seems to confirm the latest ZEW survey suggesting that an adverse effect stemming from the euro appreciation has begun fading. Bear in mind the higher euro does not has to translate into the softer economy’s performance thereby weakening inflationary pressures. It’s all about what factors stand behind a rise in the currency.
Furthermore, yet more exuberance might be found in the services sectors which has trailed behind the manufacturing one of late. However, it was not the case this month as the three indices marked a hefty pick-up:
- France: 57.1 vs 54.8 expected
- Germany: 55.6 vs 53.7
- Euro Area: 55.6 vs 54.8
As you can see there was nothing disappointing there while the most impressive increase was seen in France which already backed to the levels from before holiday. Although, there were preliminary readings hence some revisions might be made, it’s unlikely to experience larger downgrades. Putting all the above-mentioned together one could conclude that the economic expansion in the Euro Area is getting more broad-based which is in line with remarked voiced by Draghi at the latest press conference.
Technically, the single currency popped close to 1.2000 but the move was quickly faded. Nonetheless, given such the sturdy soft readings one could assume that bulls might try to do so yet again. Key resistances are placed at 1.2030 and 1.2070 respectively. On the other hand, a resumption of declines could run into an obstacle in form of a short-term trend line.