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Eurozone PMI Data Causes Sell Off

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Markit Economics have just published the Purchasing Managers Indices (PMI) for the Eurozone for March. The Manufacturing number is 53.0, against a consensus estimate of 53.0 this is very slightly down on the February reading of 53.2. The Services PMI came in at 52.4, versus consensus of 52.6, again slightly lower than the previous months reading of 52.6. Finally the Composite PMI was published at 53.2, this is lower than the expected figure of 53.3 and down from the February figure of 53.3.

Market expectations were tempered by the publication earlier this morning of the German version of these figures. Germany, being the Eurozone’s largest economy, carries significant input into the overall Euro area data. The German Services PMI was softer than expected at 54.0 and also down on February’s reading of 55.9, the Manufacturing PMI number was also off at 53.8 against last months reading of 54.8.

The Euro has had a roller coaster morning with the PMI from various Eurozone countries being released on a staggered basis over the course of the last hour. Unlike Germany, the French PMI data was surprisingly positive when published just over an hour ago. Services were up to 51.4 from 47.2 while Manufacturing was up to 51.9 from 49.7. French PMI’s had been lagging behind the Eurozone and therefore had been expected to catch up to a degree. The surprise element was the size of the gain and the swing from the contractionary sub 50 number to this mornings expansionary readings.

EUR/USD jumped 25 points on the back of the French data at 8am (GMT), the follow-up German reading at 8:30am eliminated all gains and caused a dramatic 30 point gap lower in this currency pair. Overall Eurozone PMI readings just released have now pushed the Euro further lower back into the high 1.37s and the selling pressure continues.

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