020 7898 0500It was PMI day in Germany and the eurozone and the figures served up further disappointment. With the exception of services PMI in Germany, all readings had been expected to fall and, although they did, they fell by more than expected. The markets took this as further evidence of a slowing economy and the euro weakened sharply against the dollar and also lost ground against the pound.
Composite, manufacturing and services PMI in Germany had been expected to come in at 54.7, 57.8 and 53 respectively, but the actual figures were 53.1, 56.8 and 52.1. In the eurozone, composite PMI came in at 54.1, manufacturing hit 55.5, while services hit 53.9. The readings were all flash figures and might yet be revised upwards, but it will give the markets something to think about.
Consumer confidence in May also came in below expectations by falling to 0.2 from 0.3 the month before. It had actually been forecasted to increase to 0.4. Today we will see German Gfk consumer confidence for June and the final reading of Germany’s GDP growth rate for the first quarter of 2018. Worryingly, GDP is expected to fall from 2.9% to 2.3%. We could yet see further euro weakness.
