The European majors find support, with the DAX30 leading the way, while the EUR hits reverse. Manufacturing PMIs countered disappointing German retail sales figures.
It was a busy morning on the economic calendar, with economic data from France, Germany, Italy, Spain, and for the Eurozone in focus.
Manufacturing Sector Activity
In January, the Eurozone’s finalized Manufacturing PMI came in at 54.8, an upward revision from a prelim 54.7. In December, the Manufacturing PMI had stood at 55.2.
According to the Markit Survey,
- While growth was recorded across all three broad market groups, falling new orders pegged back consumer goods consumers.
- Across the Eurozone, new order growth was slower than in December despite export order growth at its most marked in 3-months.
- Companies cut staffing levels at the turn of the year. The pace of job shedding was the weakest since Jun-19, however.
- Confidence across the sector rose to a 3-year high in January, supported by hopes that vaccine developments would ease COVID-19 restrictions.
By member state:
- The Netherlands stood at the top of the PMI table, with a 28-month high 58.8.
- Germany ranked 2nd with a 4-month low 57.1, with Italy 3rd with a 34-month high 55.1.
- France ranked 6th behind Austria and Ireland, with a 6-month high 51.6.
- Only Spain’s manufacturing sector contracted, with the PMI falling from 51.0 to 49.3 in January.
At the European open, German retail sales figures for December disappointed, with sales sliding by 9.6%. Economists had forecast a more modest 2.6% decline.
On the employment front, the Eurozone’s unemployment rate held steady at 8.3% in December, which was in line with forecasts.
According to Eurostat,
- The number of unemployed persons increased by 55,000 compared with November 2020.
- When compared with December 2019, the number of unemployed was up by 1.516 million.
Through the release of today’s stats, the EUR slid from $1.21292 to a current day low $1.20834.
While the EUR was under pressure, the European majors found support through the early part of the European session.
At the time of writing, the DAX30 was up by 1.07%, with the CAC40 and EuroStoxx600 up by 0.83% and by 0.93% respectively.
The upside for the DAX30 came in spite of the slump in retail sales that will likely continue through January and part of February.
For manufacturers, however, the rise in new export orders was certainly a boost, supporting the European majors.