Flash PMI indices for December from France and Germany were released at 8:15 am GMT and 8:30 am GMT, respectively. French manufacturing and services indices turned out to be weaker than expected and a big drop was spotted in the German services PMI as well. However, German manufacturing PMI managed to beat expectations.
France
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Manufacturing: 54.9 vs 55.5 expected (55.9 previously)
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Services: 56.0 vs 57.1 expected (57.4 previously)
Germany
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Manufacturing: 57.9 vs 56.8 expected (57.4 previously)
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Services: 48.4 vs 51.0 expected (52.7 previously)
A deterioration in European PMIs was expected as economists feared that Omicron-response may slow growth. French indices not only dropped compared to a month ago but also missed expectations. However, market reaction to the release from France was barely noticeable. The biggest surprise was spotted in German data, where services PMI plunged into contraction territory. On the other hand, manufacturing PMI from Germany beat expectations and even increased month-over-month. This strengthens the case for today's readings being driven by virus fears as services are more impacted by any restrictions. Overall reaction to French and German PMIs was mixed. Equities seesawed without a clear direction while euro gained.
EURUSD is trading higher today and beat in German manufacturing data provided more fuel for bulls. The main currency pair is currently testing a short-term resistance zone in the 1.1300 area. Source: xStation5
