- Rebound in German data, with a clear improvement in the services sector.
- Slight improvement in French manufacturing sentiment, but a significant decline in services.
- EURUSD continues to recover.
- Rebound in German data, with a clear improvement in the services sector.
- Slight improvement in French manufacturing sentiment, but a significant decline in services.
- EURUSD continues to recover.
Germany Manufacturing PMI (preliminary, October): 49.6 (expected: 49.5; previous: 49.5)
Germany Services PMI: 54.5 (expected: 51.0; previous: 51.5)
France Manufacturing PMI (preliminary, October): 48.3 (expected: 48.2; previous: 48.2)
France Services PMI: 47.1 (expected: 48.7; previous: 48.5)
Germany PMI: Clear improvement, but risks remain
Germany’s PMI data show the fastest growth in output in over two years, with rising new orders and backlogs in both manufacturing and services. This suggests a strong start to Q4 and a pickup in economic recovery. Particularly positive is the increase in orders and employment in services, although manufacturing continues to see job cuts. Supply-chain uncertainties (notably in semiconductors) persist, negatively impacting sectors such as automotive. Rising labor costs continue to feed through to higher prices, but service firms are managing to pass part of these costs on to clients.
France PMI: Further decline, moderate labor optimism
France’s PMI indicators were weak, with the October Flash Composite PMI falling to 46.8 points, firmly in recession territory. The decline in output across both manufacturing and services points to broad-based demand weakness. Companies remain cautious about the outlook, reflecting a fragile global environment and domestic political uncertainty. On a positive note, labor market resilience and easing price pressures may offer some relief for the ECB. Despite efforts to stimulate sales through price cuts, the French economy continues to face a prolonged period of stagnation.
EURUSD continues moderate gains
Looking at the EURUSD pair, we observe a clear upward attempt over the last three sessions, with buying interest around the 1.1600 level. The U.S. dollar remains uncertain ahead of the Fed’s decision and amid ongoing government shutdown concerns. Although U.S. yields have climbed back above 4%, the EURUSD still shows a significant divergence from TNOTE, suggesting the U.S. dollar may be overvalued.
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