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EURUSD Falls Despite Improving EU Consumer Confidence

James Boston
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Preliminary Consumer Confidence data from the European Commission is pointing towards a pick up in sentiment for the month of October. The headline reading just announced is –11.1 compared to September final reading of -11.4, market consensus was for this month’s preliminary reading to be reported as having fallen to -12.0.

A further round of preliminary data for the Eurozone has also been published today in the form of the early indicators for the October Purchasing Managers Indices (PMI). These figures from Markit Economics are indicating mixed results across the major economies but point towards a general, if slight, pick up in the Eurozone. The headline aggregated numbers for the bloc show that the PMI Composite may have risen two points from 52.0 to 52.2 this month, this contains a positive surprise element for markets that had been anticipating a further fall to 51.7 for the month. Breaking this out by key sector shows a welcome gain in the Manufacturing PMI, the number has been revealed as 50.7 for the month which represents a gain from the 50.3 experienced in the final September figures, this number was anticipated to fall to 49.9 in October. The Services PMI has not managed to improve but at 52.4 it means that the expected fall to 52.0 did not materialise.

These latest PMI’s are showing signs of gain in Germany while France continues to deteriorate. The German PMI Composite has been posted as 54.3, up from last month’s 54.1 and proving market analysts, who had been expecting a further fall to 53.6, to be wrong in the forecasts. Germany’s Manufacturing PMI holds the greatest improvement at 51.8, up from the contractionary 49.9 experienced last month while the Services PMI slipped further from 55.7 to 54.8. The French PMI numbers are down across the board. The Composite has fallen further to read at 48.0 from 48.4 last month. France’s Services PMI has fallen to 48.1 from 48.4 while it’s Manufacturing PMI dropped to 47.3 from 48.8.

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