French PMIs set off EUR selling, German stats also miss
French services PMIs for Dec came in significantly lower this morning, dropping from 55.1 to below 50 to print a 49.6 reading with the blame put squarely on the protests in France over fuel duties. The composite rate is also below the pivotal 50.0 mark to signal a period of contraction, as is the manufacturing index at 49.7 which duly started off the EUR selling this morning.
German PMIs then came in weaker also, with the manufacturing index in from 51.8 to 51.5 which at the very least remains in expansionary territory. Services were also lower from 53.3 to 52.5 to round off a weak set of forward looking data in the Eurozone and the prospects for the EUR are not looking good.
EUR/USD is now looking to pressure support ahead of 1.1300 and a break below here technically points to another test of the downside where 1.1215 is now looking vulnerable again.
Interestingly, EUR/GBP is still holding its ground around the 0.9000 level this morning, so EUR/USD weakness is pressing on Cable which is grinding out new lows on the day as a result.
The EU wide PMIs should reflect the component weakness seen above, so we now also look to wage growth in Q3 across the Eurozone region at 10.00 London time.