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Euro Zone Business Activity Surprises in October

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Manufacturing and services output in the euro zone rose above all expectations in October, according to figures from Markit.

The composite purchasing manager’s index (PMI) came in at 54.0, up from 53.6 in September and above expectations for a reading of 53.4 from analysts polled by Reuters. The 50-point mark separates growth from contraction.

Earlier this morning, French composite PMI was released showing the index had risen to 52.3, up from September’s final figure of 51.9 and beating analysts’ downbeat forecasts for a decline to 50.2.

The good news kept coming from Germany, the euro zone’s largest economy, whose PMI came in at 54.5 in October, up from 54.1 in the previous month and brushing off concerns over the Volkswagen scandal or slowdown in China.

The results could add fuel to the fire for the European Central Bank (ECB) to increase its stimulus program in the 19-country euro zone in order to boost growth and the rate of inflation, which is currently negative.

CNBC

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.
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