THE TAKEAWAY: EUR Euro-zone, French, and German PMI data for March disappoints across the board, signaling steeper recession which is likely to continue through 3Q’13 > EURUSD BEARISH
The worst economic slump since the depths of the global financial crisis in 2008-2009 looks set to continue in Europe, as the core regions begin to feel the brunt of the slowdown. The preliminary March PMI figures out of France, Germany, and the broader Euro-zone all disappointed across the board, with all but one – German PMI Services – holding in or falling back into contraction territory. The headline figures are as follows:
- 04:00 EST/08:00 GMT: EUR French PMI Manufacturing (MAR P): 43.9 vs 44.2 expected, from 43.9.
- 04:00 EST/08:00 GMT: EUR French PMI Services (MAR P): 41.9 vs 44.0 expected, from 43.7.
- 04:30 EST/08:30 GMT: EUR German PMI Manufacturing (MAR A): 48.9 vs 50.5 expected, from 50.3.
- 04:30 EST/08:30 GMT: EUR German PMI Services (MAR A): 51.6 vs 55.0 expected, from 54.7.
- 05:00 EST/09:00 GMT: EUR Euro-zone PMI Composite (MAR A): 46.5 vs 48.2 expected, from 47.9.
- 05:00 EST/09:00 GMT: EUR Euro-zone PMI Manufacturing (MAR A): 46.6 vs 48.2 expected, from 47.9.
- 05:00 EST/09:00 GMT: EUR Euro-zone PMI Services (MAR A): 46.5 vs 48.2 expected, from 47.9.
Needless to say, the data flies in the face of commentary provided on March 7 by European Central Bank President Mario Draghi, in which he made clear that the central bank believes that growth will return to the region “later in the year,” despite he himself downgrading the 17-nation currency bloc’s growth forecasts for 2013 and 2014.
EURUSD 1-minute Chart: March 21, 2013
Charts Created using Marketscope – Prepared by Christopher Vecchio
The EURUSD has traded quite negatively following the release of the French PMIs at 04:00 EST/08:00 GMT (it is worth noting that the releases came out two minutes early across the board). The EURUSD touched a session high of 1.2949 ahead of the round of PMIs, with a fresh session low established at 1.2879 after the release of the broader Euro-zone figures. Price has since recovered to 1.2913, at the time this report was written.
--- Written by Christopher Vecchio, Currency Analyst
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