Preliminary Surveys on Productivity Fall for China and Europe

Surveys sounded warning bells for the global economy on Thursday as euro zone businesses grew less quickly than any forecaster expected and China’s factories lost momentum.

The downbeat data, alongside evidence of further price-cutting, will add to calls for more policy action from the European Central Bank, while the first drop in Chinese manufacturing output for six months will heap similar pressure on authorities in Beijing.

“It does reinforce the case for quantitative easing from the European Central Bank,” said Alan Clarke, European economist at Scotiabank, of the euro zone PMIs.

 
Markit’s Composite Flash Purchasing Managers’ Index for November, based on surveys of thousands of companies and seen as a good growth indicator, fell to 51.4, missing even the lowest forecast in a Reuters poll.

The service industry PMI also undershot all forecasts by falling to 51.3, while the factory PMI’s dip to 50.4 missed consensus. However, all three readings held above the 50 mark that separates growth from contraction.

via Reuters

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

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