EU/UK PMI results surprise

The Euro-Zone is experiencing an accelerating downturn...



The Euro is under pressure today after the latest round of PMI data caused some concern amongst traders, investors and economists alike. Things are moving from bad to worse in the region as far as growth is concerned and so the ECB must pause its interest rate hiking cycle and in fact consider cutting rates sooner than expected (bad news for the €). Here's why;

- The private sector output declined at the steepest rate for over 10-years
- The composite reading is at a 35-month low
- The services reading is at a 32-month low
- The manufacturing figure is at a 16-month low

Not a good day for the EU/€ then, but not something that was unexpected either to be honest with recession fears already mounting. Onto the UK and the results were far 'less bad'. The all-important services number was stagnant just below the growth mark for 2-months in a row. But manufacturing surprised on the upside with a reading of 45.2 up on last month's 44.3.

Further helping the Pound this morning was the delayed unemployment rate which has actually fallen for the first time in many months to 4.2% from 4.3%. Job losses were materially lower compared to previous months too, all of which help to underpin Sterling at current levels on the market.