Eurozone economy slowing down? – MP

FXStreet (Barcelona) - Dean Popplewell, Director of Currency Analysis at MarketPulse, reviews the Eurozone PMI release and notes that the soft number signals a falling growth momentum in Q2, which combined with Greece fears might be bad for the eurozone economy.

Key Quotes

“Flash composite PMI data this morning shows that the eurozone’s economy slowed slightly this month (53.5 vs. 54); nonetheless it does continue to grow at a faster pace than in recent years.”

“To the optimist, it seems the euro economy may be emerging from near stagnation, aided by lower oil prices, a weakening EUR and a stoic ECB. However, the fall in the eurozone composite could also suggest that fears over Greece might already be starting to dampen growth in the region. The composite headline fall reflected decline in both the manufacturing and services components.”

“The country breakdown revealed a small fall in the German index, but at 54.2 it remains at a relatively high level and is consistent with fairly decent GDP growth for now. But the French composite, Europe’s second largest economy, has edged back towards stagnation (50.2) as export orders fall at the fastest pace in six-months. It seems that the weaker EUR is not offsetting that country’s loss of competitiveness.”

“Collectively, the PMI data would suggest that the Eurozone could be failing to gather momentum in Q2 and with fears of a Grexit becoming a reality will only raise further the threat of renewed economic slowdown for the region.”