|ECB interest rate decision & following meeting to create potential volatility later today..
|An economic PMI reading below 50 means a contraction and that is exactly where the Euro-Zone finds itself currently. A composite reading of 47.9 in January was lower than December's 48.8 and way off the 49 estimate. Services PMI was down too from 48.8 to 48.4 with price pressures still increasing in the sector.
Both Germany and France were to blame for the weak figures as both nations reported a decline in overall PMI data. The only saving grace was from the manufacturing sector which did increase from 44.4 to 46.6, but is still fully in contraction mode. It's a tricky spot for the ECB who are fighting sticky inflation with no growth and this is leading to the single currency to suffer under the pressure.
It was a much better day for the UK & US economies with both posting positive growth numbers. The latter has been performing well for over a year now and all PMI data shows over the 50 mark for January.
For 3 consecutive months now, the UK has comfortably been above the 50 mark in both the composite and the all-important services sector. Manufacturing has been lagging behind, but for the last 6-months there has been a steady increase in the number.
Yesterday saw the £-€ rate hit a 4-month high which it has been flirting with for a while. The ECB will determine whether the pair falls or continues to improve later today. £-$ is still trading at a near 5-month high and so both are very favourable just now for Sterling sellers.