German Factory Orders and Member State Service PMIs Peg Back the EUR

It’s been a busy start to the day on the Eurozone economic calendar this morning.

German factory orders were in focus along with Italian and Spanish Services PMIs.

Finalized services and composite PMIs were also out from France, Germany, and the Eurozone.

German Factory Orders

In September, German factory orders increased by 1.3%, partially reversing an 8.8% tumble from August. Economists had forecast a 2.0% rise.

According to Destatis,

• New orders in the manufacture of machinery and equipment surged by 12.2%.
• There was also a 9.6% jump in new orders in the manufacture of motor vehicles, trailers, and semi-trailers.
• Compared with Feb-2020, the month before COVID-19 restrictions, new orders were up 8.6%.
• Domestic orders were down 5.9%, month-on-month, however, while foreign orders were up 6.3%.
• New orders from the euro area fell by 7.3%, while new orders from other countries supported with a 14.9% jump (excl. major orders).

Member State PMIs

The Spanish Services PMI slipped from 56.9 to 56.6 versus a forecasted 55.8. For Italy, the services PMI slid from 55.5 to 52.4 versus a forecasted increase to 56.6.

In October, the French Services PMI rose from 56.2 to 56.6, which was in line with prelim.

By contrast, the German services PMI slid from 56.2 to 52.4, which was also in line with prelim.

The Eurozone

As a result of the mixed numbers, the Eurozone’s Services PMI fell from 56.4 to 54.6. The Eurozone’s Composite PMI declined from 56.2 to 54.2, which was down from a prelim 54.3.

According to the Eurozone Markit Survey,

• Expansions in the manufacturing and services sector cooled at the start of the final quarter.
• Growth at goods producers slowed to a particularly notable degree, easing to the weakest since the July recovery began.
• Service sector growth also softened, with the rate of growth falling to a 6-month low.
• Supply-side constraints were a major headwind in October and also fueled inflationary pressures.
• Both input costs and output prices rose at record rates

Country ranking

Ireland ranked 1^st, with a 2-month high composite of 62.5. Spain ranked 2^nd, with a 6-month low composite of 56.2.

Both France (54.7) and Italy (54.2) also had 6-month low composites.

Sitting at the bottom of the table, however, was Germany. In October, Germany’s Composite fell to an 8-month low 52.0.

Market Impact

Ahead of the trade data, the EUR had risen to a post-stat and current day high $1.16165 before hitting reverse. The reversal saw the EUR at sub-$1.1580 levels ahead of today’s stats.

In response today’s figures, the EUR rose to a post-stat high $1.15821 before falling to a post-stat and current day low $1.15427.

At the time of writing, the EUR was down by 0.53% to $1.15499.

Next Up

Nonfarm productivity and unit labor costs for the 3^rd quarter and September trade data.

Of greater influence, however, will be the weekly jobless claims due out shortly…