Summary:
- German manufacturing PMI plunges in March producing the steepest decline since August 2012
- Services PMIs also move lower this month
- Euro slips on catastrophic readings
The preliminary PMI readings from the two major economies came in well below expectations defying the outlook for an economic improvement this quarter and pushing the common currency much lower. The index for German manufacturing dipped to 44.7 from 47.6 and reached the lowest point since the mid-2012 (the euro crisis), while the French PMI index for manufacturing moved down to 49.8 from 51.5. Services PMIs from both countries deteriorated as well. As a result, manufacturing PMI for the Eurozone fell to 47.6 from 49.3 whereas services PMI dipped to 52.7 from 52.8. The data seems to confirm the latest ECB’s step to implement new TLTROs.
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Manufacturing PMIs tumbled in March and pushed the EURUSD below 1.13. The German bund trades more than 3 bps lower following the readings. Source: Macrobond, XTB Research
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