European PMIs Positive But Point to Growing Germany And France Divide

Euro zone businesses ended the year on a high as new orders surged, but the chasm between a resurgent Germany and wilting France has widened this month, surveys showed on Monday.

Markit’s Flash Euro zone Composite Purchasing Managers’ Index (PMI), which gauges business activity across thousands of companies large and small, rose to 52.1 in December from 51.7 last month.

It was the second-highest reading since mid-2011 and beat the median forecast in a Reuters poll for 51.9. The index has been above the 50 mark that denotes growth for all the second half.

However, survey compiler Markit warned that while the increase in growth was reassuring, the country-by-country breakdown of the data revealed a lopsided recovery, with France floundering and Germany steaming ahead.

“The rebound in the euro zone composite PMI in December makes for encouraging reading and may serve to sooth concerns about the sustainability of the recovery,” said Martin van Vliet, senior economist at ING.

“But we should not get too carried away either – the still-low level of the overall index is a firm reminder that this recovery is still very fragile and sluggish.”

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza