Service Sector and Composite PMIs Deliver EUR Support

It was a busy Eurozone economic calendar this morning. Member state and Eurozone service sector and composite PMIs were in focus.

Member States

For Spain, the services PMI fell from 56.6 to 53.4 versus a forecasted 55.2.

In Italy, service sector activity saw slower growth, with the PMI declining from 52.8 to 52.1. Economists had forecast a fall to 51.5.

For France, the services PMI rose from 55.5 to 57.4, which was in line with prelim figures.

Germany’s services PMI increased from 55.8 to 56.1, up from a prelim 55.0.

The Eurozone

For the Eurozone, the services PMI rose from 55.5 to 55.6, up from a prelim of 54.8.

As a result, the Composite PMI slipped from 55.5 to a two-month low of 54.9, up from a prelim 54.5.

According to the March survey,

• At the composite level, service sector activity drove growth in March, with output up marginally from February.
• The upturn was supported by a loosening of COVID-19 containment measures, leading to higher activity levels to support increased demand for goods and services.
• New export orders fell for the first time since Nov-2020, with the Russian invasion of Ukraine hitting the manufacturing sector in particular.
• Inflationary pressures and supply-chain issues resurfaced, adding to the private sector woes.
• As a result, business confidence weakened across the services and manufacturing sectors.
• Output expectations tumbled to their weakest in 17-months.

By Country

• Ireland ranked first, with the composite PMI hitting a 5-month high of 61.0.
• France came in second, with an 8-month high of 56.3, followed by German, Spain, and Italy, each seeing their composites at 2-month lows.

Market Impact

Ahead of today’s stats, the EUR had fallen to a pre-stat and current day low of $1.09623 before rising to a pre-stat high of $1.09839.

The EUR found support over the release of today’s PMIs, hitting a day high of $1.09887 before easing back.

At the time of writing, the EUR was up by 0.10% to $1.09833.

Next Up

ISM Non-Manufacturing PMI figures from the U.S. While the numbers will influence, the markets are also awaiting news of fresh EU sanctions on Russia, which will draw plenty of attention.