Euro Zone Business Activity Surprises in October

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.


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Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam