Flash PMIs for February from Europe and the United States are key releases of the day. French and German releases showed continuation of a trend - manufacturing continued to rebound while services kept underperforming. Highlights of the reports:
France
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Manufacturing: 55.0 vs 51.5 expected ( 51.6 previously)
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Services: 43.6 vs 47.0 expected (47.3 previously)
Germany
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Manufacturing: 60.6 vs 56.5 expected (57.1 previously)
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Services: 45.9 vs 46.5 expected (46.7 previously)
However, such a divergence between the performance of the manufacturing and services sectors should not come as a surprise. After all, pandemic restrictions that are currently in place in France and Germany hurt primarily services. As the pandemic is far from over and countries decide to extend restrictions into March, the trend may continue in the next month.
Reaction of the European markets has been quite muted. DAX dipped in a knee-jerk move after the release of both French and German data but range of moves did not exceed 0.15%. EURUSD gained after German data and moved above 1.2120 handle.
EURUSD extended upward move following European PMIs that showed continued outperformance of the manufacturing sector over services sector. Source: xStation5
