The Takeaway: eurozone Composite PMI hits 3-year low-> Markit Economics predicts-0.5% contraction in the second quarter-> Euro set aside earlier gains
Out of manufacturing and services in the euro area has reached the level the lowest since June 2009, according to the economic managers of Markit purchasing index survey of the. The PMI composite index at 46.0 may, slightly above the previously estimated 45.9. The euro-zone composite PMI has fallen for four straight months, since the January index reported the increase in production. A survey less than 50 points of exit of contracting PMI.
The lower PMI indicates a slowdown of the economy in Europe, even the usually strong Germany shows contracting output. Composite German PMI fell to a low 49.3 of 34 months in may, the result of 50.5 positive in April. French and Spanish composite PMI also decreased in May.
Services PMI in each country of the euro have been developed this morning; Germany services PMI were reported as expansion depending on the outcome of 51.8 for may, even lower than the previously estimated 52.2. France and the Italy both had contracting production services, although the Italy of 42.8 PMI was better than the estimated 42.0 and 42.3 index reported in April.
Markit Economics reported this weak demand has led to losses of jobs between services and manufacturing industries. However, a slight increase of German jobs in may softened the unemployment rate for the euro area in a whole. Chief Economist Chris Williamson of the markit predicts a contraction of 0.5% of the Q2 GDP of the euro area, according to the report.
It is said that G7 leaders are meeting today to discuss ways to improve the European economy and to help the Greece to avoid output of the single currency. German Prime Minister Angela Merkel said so far that it does support joint Government in euro bonds.
EUR/USD reversed earlier gains of day in the hours leading up to the release of the PMI, probably fall because of feelings on the G7 meeting possible and the negative comments recently by the Minister of the Spanish budget.
DailyFX provides news forex and technical analysis on trends affecting the world market currencies.
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Out of manufacturing and services in the euro area has reached the level the lowest since June 2009, according to the economic managers of Markit purchasing index survey of the. The PMI composite index at 46.0 may, slightly above the previously estimated 45.9. The euro-zone composite PMI has fallen for four straight months, since the January index reported the increase in production. A survey less than 50 points of exit of contracting PMI.
The lower PMI indicates a slowdown of the economy in Europe, even the usually strong Germany shows contracting output. Composite German PMI fell to a low 49.3 of 34 months in may, the result of 50.5 positive in April. French and Spanish composite PMI also decreased in May.
Services PMI in each country of the euro have been developed this morning; Germany services PMI were reported as expansion depending on the outcome of 51.8 for may, even lower than the previously estimated 52.2. France and the Italy both had contracting production services, although the Italy of 42.8 PMI was better than the estimated 42.0 and 42.3 index reported in April.
Markit Economics reported this weak demand has led to losses of jobs between services and manufacturing industries. However, a slight increase of German jobs in may softened the unemployment rate for the euro area in a whole. Chief Economist Chris Williamson of the markit predicts a contraction of 0.5% of the Q2 GDP of the euro area, according to the report.
It is said that G7 leaders are meeting today to discuss ways to improve the European economy and to help the Greece to avoid output of the single currency. German Prime Minister Angela Merkel said so far that it does support joint Government in euro bonds.
EUR/USD reversed earlier gains of day in the hours leading up to the release of the PMI, probably fall because of feelings on the G7 meeting possible and the negative comments recently by the Minister of the Spanish budget.DailyFX provides news forex and technical analysis on trends affecting the world market currencies.
Learn forex trading with a free account of practice and exchange of graphics of FXCM.
THE TAKEAWAY: Producer prices in the Euro area lower than expected in April -> Lower energy costs, deepening economic slump factor into drop -> Euro price action reserved after yesterday’s weakness
