Just as the UK Budget gets more depressing after a second or third reading, so the Eurozone flash PMI’s just get better and better. The manufacturing index of 60.0 was the strongest in 211 months, the services index was at a 6-month high of 56.2 whilst the composite index was at a 79-month high of 57.5.
Markit’s Press Release noted, “The eurozone economy is showing signs of picking up momentum in the fourth quarter, with multi-year highs seen for all main indicators of output, demand, employment and inflation in November. Business activity and prices rose at the steepest rates for over six years, while the largest accumulation of uncompleted work for over a decade encouraged firms to take on staff at a rate not seen for 17 years….”
“Inflows of new orders showed the largest gain since February 2011. The biggest increase in factory new orders since April 2000 helped offset a slight moderation in the service sector. Goods exports increased at a survey record pace”.
No wonder the EUR was the strongest major currency on Thursday; rising to USD1.1855 overnight and pushing GBP/EUR back down into the low 1.12’s.
If the PMI’s are reflected in a similarly strong German ifo Survey this morning, then the EUR ought to have another good day. Keep an eye too on German politics: if SPD leader Martin Schulz resigns, it may make it easier to restart Coalition talks.