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23 Apr 2013
Forex Flash: Mixed PMIs lead to flat EMU figure at 46.5, ECB to expect soft inflation – TD Securities
FXstreet.com (Barcelona) - Mixed flash PMIs in the Eurozone totaled in a flat EMU figure at 46.5 in April. In France, “output and new orders both improved (although continue to point to contraction albeit at a slower pace) but the employment component deteriorated while both the input and output price components fell”, leading to rising manufacturing from 44.0 to 44.4 and services from 41.3 to 44.1.
“Both the manufacturing and service PMIs for Germany were worse than expected with manufacturing falling to 47.9 (49.0E, 49.0P) and services falling from 50.9 to 49.2 (51.0E). New orders and new export orders were soft and generally the worst they have been this year but, unlike France, employment increased in the service sector and was close to flat in manufacturing”, wrote TD Securities analyst Tim Davis, adding that cost pressures are reported to continue to trend lower just like in France. “So there is enough here to help the ECB feel like inflationary pressures are developing as soft as they expected (and in fact are likely to be revised lower in June if commodity pullback persists)”, Davis concluded.
“Both the manufacturing and service PMIs for Germany were worse than expected with manufacturing falling to 47.9 (49.0E, 49.0P) and services falling from 50.9 to 49.2 (51.0E). New orders and new export orders were soft and generally the worst they have been this year but, unlike France, employment increased in the service sector and was close to flat in manufacturing”, wrote TD Securities analyst Tim Davis, adding that cost pressures are reported to continue to trend lower just like in France. “So there is enough here to help the ECB feel like inflationary pressures are developing as soft as they expected (and in fact are likely to be revised lower in June if commodity pullback persists)”, Davis concluded.