Eurozone Private Sector PMIs for December Launch the EUR to $1.22

The Stats

After the doom and gloom of November, December’s prelim private sector PMI figures from France, Germany, and the Eurozone impressed this morning.

In spite of the continued spike in new COVID-19 cases, both manufacturing and service sector conditions improved.

The French manufacturing sector returned to expansion, with the PMI rising from 49.6 to 51.1. More impressively, however, was a jump in the services PMI from 38.8 to a 2-month high 49.2.

While French numbers impressed, Germany’s PMI figures stole the show. The Manufacturing PMI jumped from 57.8 to a 34-month high of $58.6. Service sector activity contracted at a slower pace, with the PMI rising from 46.0 to 47.7.

With both France and Germany seeing a marked improvement in private sector activity, Eurozone figures failed to disappoint.

The Eurozone PMIs

The Eurozone Manufacturing PMI rose from 53.8 to a 31-month high of 55.5. Less impressive, but still positive was a rise in the services PMI from 41.7 to a 3-month high of 47.3. Economists had forecast PMIs of 53.0 and 41.9 respectively. The improved numbers led to a rise in the Composite PMI from 45.3 to 49.8, versus a forecasted 45.8.

From the Eurozone’s prelim December Markit Survey, key takeaways included:

• Inflows of new orders rose marginally and for the 1^st time since September. A jump in new orders across the manufacturing sector and a slowdown in the rate of loss of new business in the services sector delivered.
• New export orders across the manufacturing sector rose at the 2^nd fastest rate in 34-months.
• By contrast, service sector export orders fell sharply once more.
• As a result of the pickup in new business, the rate of depletion of backlogs of work was the smallest since February.
• Companies reportedly reined in job cutting, with employment falling at the slowest pace since the start of the pandemic.
• Supported by positive vaccine news, sentiment about future prospects rose to the highest level since Apr-18.

The EUR, the DAX30, and the CAC40

In response, the EUR jumped from pre-data $1.215 levels to $1.22 levels ahead of the Eurozone figures.

At the time of writing, the EUR was up by 0.44% to $1.22039, off marginally from a current-day high of $1.22119.

It wasn’t just the EUR that responded to the PMI numbers. The DAX30 was up by 1.43% at the time of writing, with the CAC40 and EuroStoxx600 seeing gains of 0.93% and 0.96% respectively.

Positive PMI numbers and the EMA’s planned review of the BioNTech/Pfizer Inc. vaccine next week, coupled with hopes of a Brexit deal are now positives for the European boerses.