April Service PMIs Fail to Deliver a EUR Bounce Back

It was a particularly busy day on the economic calendar. Service sector PMI figures for Italy and Spain were in focus early in the session.

Finalized services and composite PMIs from France, Germany, and the Eurozone also drew attention.

Member State PMIs

In April, Spain’s services PMI rose from 48.1 to 54.6, while Italy’s services PMI slipped from 48.6 to 47.3.

Economists had forecast PMIs of 50.0 and 49.8 respectively.

From France, the services PMI rose from 47.9 to 50.3, which was down from a prelim 50.4.

Germany’s services PMI fell from 50.8 to 49.9, which was down from a prelim 50.1.

The Eurozone

For the Eurozone, the Services PMI rose from 49.6 to 50.5, which was up from a prelim 50.3. As a result, the composite PMI increased from 53.2 to 53.8, which was up from a prelim 53.7.

According to the finalized Markit Composite Survey,

• The latest data from the private sector indicated the fastest expansion since July and the second best in over two-and-a-half years.
• Goods producers continued to lead the way, with output rising at a rate little changed from March’s record.
• Service sector output returned to growth following 7-months of continuous contraction.
• Germany led the way again in terms of overall growth, supported by strong manufacturing sector growth.
• A jump in service sector activity in Spain saw private sector growth at its strongest in over 2-years.
• Growth in both France and Italy was modest in April, while growth in France was at its best in the past 8-months.

The Details

• New orders across the private sector rose at the most marked pace in over two-and-a-half years.
• Firms reported higher sales in both domestic and international markets.
• The rate of backlog growth was the sharpest for 39-months and supported a pickup in hiring.
• Firms increased staffing levels to the strongest degree for 2-years.
• Optimism across the private sector reached its highest since composite data were first available in mid-2012.

Market Impact

Through the release of the PMI figures, the EUR fell to a low and a current day low $1.19860 before rising to a high $1.19981.

The upside was short-lived, however, with the EUR easing back.

At the time of writing, the EUR was down by 0.17% to $1.19941.

Next Up

April ISM Non-Manufacturing PMI and finalized Markit Services and Composite PMI numbers from the U.S are due out. Ahead of the private sector numbers, ADP nonfarm employment change figures will also influence.