European PMIs Drop Despite French Surprise

There are signs dwindling demand from Asia, led by China, is starting to hurt businesses in the euro zone, according to PMI survey compiler Markit.

Private business growth in the currency bloc slowed this month as Asian demand weakened, leading to fewer new jobs and forcing factories to reduce output.

The Markit Composite Flash PMI for the bloc came in at 53.9 in September against predictions of 54.1, down from 54.3 last month. Markit said the PMIs point to third-quarter growth of 0.4 percent.

“It is hard to see euro zone growth really kicking on,” said Howard Archer at IHS Global Insight.

“There is the very real risk that slowing growth in emerging markets like China not only hits euro zone exports but also has a negative impact on business sentiment and leads to a scaling back of investment and employment plans.”

Business activity in Germany, the euro zone’s biggest economy, slowed slightly in September while activity rebounded in France as manufacturing output swung back to growth after two consecutive months of decline.

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