German Unemployment Data Delivers EUR Support Amidst Mixed PMI Numbers

It was a particularly busy start to the European session. Member state and Eurozone manufacturing PMIs were in focus along with German retail sales and unemployment figures. In what was a hectic start to the day, French prelim inflation figures were also out, with Eurozone unemployment numbers due out later today.

The German Economy

In December, German retail sales slid by 5.5%, reversing a 0.8% increase from November. Unemployment figures were upbeat, however. In December, unemployment fell by 48K, following a 29k decline in November. As a result, the unemployment rate slipped from 5.2% to 5.1% in December.

For the Manufacturing sector, the PMI rose from 57.4 to 59.8, which was down from a prelim 60.5.

Member State Manufacturing PMIs

Italy’s manufacturing sector PMI fell from 62.0 to 58.3, while Spain’s manufacturing PMI held steady at 56.2. Economists had forecast PMIs of 61.0 and 56.0 respectively.

France’s manufacturing PMI fell from 55.6 to 55.5, which was in line with prelim figures.

The Eurozone Manufacturing Sector

In January, the Eurozone’s manufacturing PMI rose from 58.0 to 58.7, which was down from a prelim 59.0.

According to the January survey,

• Production, new orders, and employment saw faster increases.
• There were also signs of supply chain constraints easing at the start of the year.
• Input price inflation eased to the weakest in 9-months.
• Factory gate charges increased to the 2^nd fastest extent in almost 20-years, however.
• By Member state, Austria ranked 1^st with a 4-month high PMI of 61.5.
• The Netherlands (60.1) and Germany (59.8) ranked 2^nd and 3^rd with 2-month and 5-month highs respectively.
• France sat at the bottom of the table with a 3-month low 55.5.

Market Impact

Ahead of today’s stats, the EUR had fallen to a pre-stat and current day low $1.12209 before finding support

EUR reaction to today’s stats was mixed, however. The EUR rose to a current day high $1.12696 in response to French inflation and German unemployment figures. In response to the manufacturing numbers, however, the EUR eased back.

At the time of writing, the EUR was up by 0.20% to $1.12658.

Next Up

Eurozone unemployment figures ahead of January’s ISM Manufacturing PMI from the U.S. Finalized U.S Markit survey manufacturing sector PMI numbers are also due out but should have a muted impact on the markets.

With U.S nonfarm payrolls due out on Friday, U.S JOLT’s job openings will also draw interest late in the day.