The French manufacturing sector returned to expansion, with the PMI rising from 49.6 to 51.1. More impressively, however, was a jump in the services PMI from 38.8 to a 2-month high 49.2.
While French numbers impressed, Germany’s PMI figures stole the show. The Manufacturing PMI jumped from 57.8 to a 34-month high of $58.6. Service sector activity contracted at a slower pace, with the PMI rising from 46.0 to 47.7.
With both France and Germany seeing a marked improvement in private sector activity, Eurozone figures failed to disappoint.
The Eurozone PMIs
The Eurozone Manufacturing PMI rose from 53.8 to a 31-month high of 55.5. Less impressive, but still positive was a rise in the services PMI from 41.7 to a 3-month high of 47.3. Economists had forecast PMIs of 53.0 and 41.9 respectively. The improved numbers led to a rise in the Composite PMI from 45.3 to 49.8, versus a forecasted 45.8.
From the Eurozone’s prelim December Markit Survey, key takeaways included:
- Inflows of new orders rose marginally and for the 1st time since September. A jump in new orders across the manufacturing sector and a slowdown in the rate of loss of new business in the services sector delivered.
- New export orders across the manufacturing sector rose at the 2nd fastest rate in 34-months.
- By contrast, service sector export orders fell sharply once more.
- As a result of the pickup in new business, the rate of depletion of backlogs of work was the smallest since February.
- Companies reportedly reined in job cutting, with employment falling at the slowest pace since the start of the pandemic.
- Supported by positive vaccine news, sentiment about future prospects rose to the highest level since Apr-18.
The EUR, the DAX30, and the CAC40
In response, the EUR jumped from pre-data $1.215 levels to $1.22 levels ahead of the Eurozone figures.
At the time of writing, the EUR was up by 0.44% to $1.22039, off marginally from a current-day high of $1.22119.
It wasn’t just the EUR that responded to the PMI numbers. The DAX30 was up by 1.43% at the time of writing, with the CAC40 and EuroStoxx600 seeing gains of 0.93% and 0.96% respectively.
Positive PMI numbers and the EMA’s planned review of the BioNTech/Pfizer Inc. vaccine next week, coupled with hopes of a Brexit deal are now positives for the European boerses.