Morning traders. The DAX rally continues despite PMI numbers failing to win many plaudits today. Check out the economic calendar for more details. The business activity in the German private sector grew at a slightly faster pace in March. This is according to a preliminary report released by IHS Markit on Thursday. The IHS Markit Flash Germany Composite PMI Output Index stood at 52.1 this month, up from March’s multi-year low of 51.4.
The growth in the services sector stood at a seven-month high. We see the Flash Germany Services PMI Business Activity Index increasing from 55.4 in March to 55.6 in April. Manufacturing activity improved slightly compared to the previous month but still remained in contraction territory as the Flash Germany Manufacturing PMI stood at 44.5. The overall picture for Germany’s private sector has changed very little according to April’s flash data. There is strong growth across the services economy. This continues to counteract the export-led weakness in manufacturing. We see slight upticks in the manufacturing indices for output, new orders and employment. We have not seen many rises within the last 6-9 months, perhaps this will boost the market.
The private sector in the Eurozone grew at a slightly slower pace in April compared to the previous month. The PMI Composite Output Index decreased from March’s 51.6 to 51.3 in April. This marks the third-lowest reading since November 2014 and signaling that the euro area’s private sector remains in its worst growth spell in five years. The manufacturing sector output fell for a third straight month as new orders contracted for the seventh month in a row. Employment growth remained almost unchanged while input buying decreased throughout the sector. Meanwhile, the service sector decelerated from a four-month high recorded in March, signaling the weakest rate of expansion since September 2016. Reduced optimism in the Eurozone private sector was associated with rising political uncertainty including Brexit, trade wars and protectionism.
“The data adds to worries that the economy has failed to rebound with any conviction from one-off factors that dampened activity late last year, and continues to show only very modest growth in the face of headwinds from slower global demand growth and subdued economic sentiment,” Chris Williamson, Chief Business Economist at IHS Markit said.
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