Germany’s Manufacturing PMI Delivers EUR Support ahead of the ECB Policy Decision

Prelim private sector PMIs and trade data were in focus ahead of the ECB’s monetary policy decision and press conference.

Member States

In December, France’s manufacturing PMI fell from 55.9 to 54.9 versus a forecasted 55.5 with the services PMI declining from 57.4 to 57.1. Economists had forecast a PMI of 56.0.

Germany’s manufacturing PMI increased from 57.4 to 57.9 versus a forecasted fall to 56.8. The services PMI slid from 52.7 to 48.4 versus a forecasted 51.0, however.

The Eurozone

In December, the Eurozone’s manufacturing PMI declined from 58.4 to 58.0 versus a forecasted 57.8. The services PMI fell from 55.9 to 53.3. Economists had forecast a decline to 54.1.

As a result, the Eurozone composite PMI decreased from 55.4 to 53.4 versus a forecasted 54.0.

According to the prelim December survey,

• The Composite Output Index fell to a 9-month low 53.4.
• Rising COVID-19 infection rates hit the services sector in December, offsetting improving manufacturing sector growth.
• Manufacturing output growth picked up and outpaced services for the first time in 5-months.
• Easing supply delays was positive, while firms’ costs and average selling prices continued to rise sharply. The rates of increase softened, however, from November’s record highs.
• Business optimism remained resilient, despite rising virus cases, supporting jobs growth.

By member state,

• Growth in Germany stalled due to the first drop in new orders for goods and services since Jun-2020.
• By contrast, France continued to growth at a solid pace, while down from November.
• Across the rest of the region, the rate of expansion was the slowest since April.

Market Impact

Ahead of today’s stats, the EUR had fallen to a pre-stat and current day low $1.12813 before rising to a pre-stat high $1.13122.

In response today’s stats, the EUR fell to a post-stat low $1.13018 before rising to a post-stat and current day high $1.13193.

At the time of writing, the EUR was up by 0.24% to $1.13191.

Next Up

Eurozone trade data is due out ahead of the ECB monetary policy decision and all-important press conference. The ECB press conference will be the key driver.

From the U.S, Jobless claims, Philly FED Manufacturing, industrial production, and prelim private sector PMI figures will also be in focus. Expect the jobless claims and service sector PMI figures to have the greatest influence.