Eurozone PMIs for services revised higher in Germany
This morning's release of Eurozone PMIs have thrown up few surprises, but we did note that Germany's final reading was revised up from 51.4 to 51.6, vs 51.2 expected. This is not a major improvement, and given Germany's strengths lie in its ailing manufacturing sector, it is unlikely that there will be any positive reaction to these numbers. PMIs in France were unchanged at 52.9, while Italy was also revised up from 51.4 to 52.2, but again, this is of little consequence unless manufacturing moves the same way.
As of yesterday, we saw EUR/USD slipping below the 1.1100 mark, gaining traction to the downside after the better ISM services release in the US in the afternoon. Support in the mid 1.1000's showed its hand as we expected, but this was the initial test. Even so, the market is trying to push higher with buyers aiming for 1.1100. Overall price action is limited however and we seem to be returning to smaller ranges once again as we await clearer signals from major data releases.
We have yet to get the releases of EU wide retail sales - due out at 10.00 am London time - but here also, we are expecting a modest reaction at best, with consumer spending not as big a contributor to Eurozone GDP as it is in the US and in the UK.