Across Europe and the UK, dreadful PMI data was reported, producing all-time lows for these critical readings across the board.
Given that the economies remain very much in lockdown, it should not come as too much of a surprise that the industries are taking a battering. Nevertheless, these are further strong recessionary signs, due to the large contractions.
Firstly, the French PMI data came out; Manufacturing: 31.5 vs 37.0 expected, 43.2 prior. Services:
10.4 vs 24.5 expected, 27.4 prior and Composite: 11.2 vs 24.5 expected, 28.9 prior.
Followed by Germany; Manufacturing: 34.4 vs 39.0 expected, 45.4 prior. Services: 15.9
vs 28.0 expected, 31.7 prior and Composite: 17.1 vs 28.5 expected, 35.0 prior.
Then finally, the Eurozone aggregate numbers; Manufacturing: 33.6 vs 39.2 expected, 44.5 prior. Services: 11.7 vs 23.8 expected, 26.4 prior and Composite: 13.5 vs 25.7 expected, 29.7 prior.
In terms of the UK data; Manufacturing: 32.9 vs 42.0 expected, 47.8 prior. Services:
12.3 vs 29.0 expected, 34.5 prior and Composite: 12.9 vs 31.0 expected, 36.0 prior.
The data is compiled by IHS Markit and their chief business economist, Chris Williamson said:
The extent to which the PMI survey has shown business to have collapsed across the eurozone greatly exceeds anything ever seen before in over 20 years of data collection. The ferocity of the slump has also surpassed that thought imaginable by most economists, the headline index falling far below consensus estimates.
EUR has been under pressure following the poor batch of data, but GBP initially has been unmoved on this, despite how concerning and dreadful these numbers are. Perhaps the markets were already fearing the worst and had this priced in. Nevertheless, some pressure should still be expected for GBP, given the heavy economic contraction and a lack of Brexit deal progress. As a reminder, GBP tends to be the worst hit in times of crisis, so any near-term rallies may continue to be sold.
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