Central Banks Forex Market Intelligence News

Eurozone October final services PMI 48.6 vs 48.2 prelim

invest on stocks
  • Prior 48.8
  • Composite PMI 47.3 vs 47.1 prelim
  • Prior 48.1

The euro area economy contracts by the most in almost two years as a further slump in new orders was noted, with uncertainty, high prices and generally weak underlying demand conditions cited by survey respondents. S&P Global notes that:

“After a weak third quarter of PMI and official GDP data, the latest survey results for the start of the fourth quarter suggest the eurozone economy is now headed for a winter recession. High inflation is dampening demand and hurting business confidence. Fears that the energy crisis could intensify over the winter period are also feeding uncertainty and weighing on decision-making.

“Nonetheless, the ECB will want to continue with monetary tightening to contain inflation . October PMI data suggest inflationary pressures remained extremely elevated across the eurozone. We did, however, see some dovish tones in the rhetoric surrounding the ECB’s October policy decision, clearly showing that the Governing Council are concerned by the rapidly deteriorating economic outlook. A substantial worsening of economic conditions in the coming months may give policymakers a difficult decision to make with regards to the path of monetary tightening, for fear of being too aggressive and prolonging the downturn.”