COVID-19 Pegs Back the EUR as German Manufacturing Sector PMI Hits a Record High

It’s a particularly busy day on the Eurozone economic calendar today. Prelim March private sector PMI numbers for France, Germany, and the Eurozone were in focus this morning.

France

According to the prelim survey, the French Manufacturing PMI rose from 56.1 to a 39-month high 58.8 in March. Economists had forecast a rise to 56.5.

The services PMI increased from 45.6 to a 3-month high 47.8, which was better than a forecasted decline to 45.5.

Germany

Manufacturing sector continued to impress in March, with the PMI rising from 60.7 to a record high 66.6. Economists had forecast an increased to 60.8.

The services sector returned to expansion, with the PMI rising from 45.7 to a 7-month high 50.8. Economists had forecast an increased to 46.2.

The Eurozone

The Services PMI increased from 45.7 to a 7-month high 48.8 in March, according to prelim figures versus a forecasted 46.0.

In March, the Manufacturing PMI rose from 57.9 to a record high 62.4 versus a forecasted 57.7.

According to the prelim survey,

• The composite PMI increased from 48.8 to 52.5, coming in ahead of a forecasted 49.1.
• As a result of a marked pick up in manufacturing sector activity, Composite PMI hit an 8-month high in March.
• While manufacturing sector output increased by a survey record, service sector activity continued to be hit by the COVID-19 pandemic.
• Manufacturers saw headcounts rise at a rate not seen since Aug-2018. Across the services sector, however, the rate of job creation was far more modest, though the largest since the start of the pandemic.
• For the private sector as a whole, new business returned to growth across the Eurozone.
• Export orders rose sharply, largely attributed to an unprecedented increase in orders across the manufacturing sector.

Market Impact

Ahead of the key stats of the day, the EUR had fallen to a pre-release current day low $1.18122, having struck $1.185 levels earlier in the day.

Through the release of the PMIs, the EUR rose from $1.18165 to a post-stat high $1.18305 before easing back.

At the time of writing, the EUR was down by 0.18% to $1.18275.

While the stats were certainly EUR positive, fresh lockdown measures are likely to send service sector activity back into deep contraction. Ultimately, that will mean that the outlook for the broader private sector remains grim.

The silver lining is, however, that manufacturing sector activity continues to surge ahead at an unprecedented rate…

Up Next

Prelim private sector PMIs for the UK and the U.S, and flash Eurozone consumer confidence figures March.