IHS Markit recently released its services and composite PMI data for the Eurozone. The data shows a firm but slower expansion in the Eurozone services sector, followed by an improving private sector activity.
IHS Markit’s composite PMI for January was at 51.3 after being at 50.9 in December. This positive change was mostly driven by a slower expansion in the services sector, as the services PMI was at 52.5 after being at 52.8 in December. Manufacturing PMI went up to 47.9 from December’s 46.3, signaling a contraction, but at a slower pace.
“The index indicated a modest rate of growth, but nonetheless the highest recorded by the survey since last August,” stated IHS Markit on its report.
This was good news for the European stock markets. By 9:46 GMT Britain’s FTSE 100 went up by 0.76 percent, reaching the 7,496.55 level. The benchmark French stock market index CAC 40 climbed 1.01 percent, at 5,994.84 followed by Spain’s IBEX35, which gained 0.71 percent at 9,631.00 and Germany’s DAX, which advanced 1.23 percent at 13,445.42.
The end of last year wasn’t precisely a good experience for Europe, with economic growth slowing almost to zero after a very hard year affected by the uncertainty associated with president Donald Trump’s trade war against China and the Brexit political crisis. The European Central bank is also amid a review of its monetary policy stance, given its failure to drive inflation levels towards its target compared to other monetary authorities, the threats of a trade war (this time against Europe) don’t help either.
“Although U.S.-China trade war tensions have cooled, the U.S. trade rhetoric has now turned to Europe, with the auto sector looking especially vulnerable to tariff threats,” explained IHS Markit’s chief business economist Chris Williamson, highlighting the fears associated to the post-Brexit deal negotiation between the Eurozone and the UK as well as unease caused by the Coronavirus epidemic.
The Euro is currently suffering losses because of the current upbeat mood around the US dollar. By 10:07 GMT the Euro lost 0.14 percent against the greenback, falling to the 1.1026 level. On the other hand, it advanced 0.21 percent against the Swiss Franc, hitting the 1.0724 level, and remained almost steady against the Japanese Yen, gaining 0.02 percent at 120.96.
Markets are now waiting for the ECB president Christine Lagarde upcoming speech, which is taking place later today.