EU markets ease on mixed European PMIs

Downward trend
Fawad Razaqzada
By :  ,  Market Analyst

European stock indices continued to head lower by mid-morning session after the latest Consumer Confidence and PMI data failed to inspire fresh buying this morning. The losses were mild, however, as investors looked forward to the publication of US PMI data and with Microsoft set to kick off US tech company earnings results.

Although the latest European PMI numbers beat expectations, the upside surprise was minimal and there were some downside surprises on a country level, with French and UK services, and German manufacturing, all disappointing expectations. The UK’s dominant services sector PMI slumped to a two-year low. The cost-of-living crisis is getting worse. This was also evident on Friday when the UK retail sales came in much weaker. The economic outlook across Europe remains highly uncertain, which calls for caution in terms of excessive risk taking.


Eurozone PMI recap


The (kind of) good:

  • Eurozone Flash Manufacturing PMI 48.8 vs. 48.4 expected and 47.8 last
  • Eurozone Flash Services PMI 50.7 vs. 50.0 expected and 49.8 last
  • UK Flash manufacturing PMI 46.7 vs 45.4 expected and 45.3 last

The bad:

  • France January flash services PMI 49.2 vs 49.8 expected
  • Germany January flash manufacturing PMI 47.0 vs 47.9 expected

The ugly:

  • UK Services PMI 48.0 (a 2-year low) vs. 49.6 expected and 49.9 last


So, overall, I don’t think the PMI data were great and the market seems to agree, with the euro and European indices both easing off earlier levels. Overall, things didn’t worsen materially, yet the improvement was not much either, with the PMIs suggesting no or very little growth overall despite the winter proving to be less harsh than expected. Concerns remain elevated about inflation being so high.

DAX still in uptrend despite weakness


The DAX has sold off a little, although it still remains in a bull trend after its impressive performance in recent months. The bears have a lot of work to do to cause a proper reversal. Key short-term support comes in around 14925. Below this, the next level of potential support is at 14677 – the December high.  If we start to see the breakdown of some support levels, only then will the bears get excited.



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