24 Mar 2015
ECB’s QE, weak euro and cheap oil push Eurozone PMIs beat consensus – ING
FXStreet (Barcelona) - Teunis Brosens of ING, reviews the Euroarea PMI release, and further comments that the recovery in PMI was aided by ECB’s QE, a soft euro and cheap oil, and the central bank might have to put in more work to strengthen Europe’s growth potential.
Key Quotes
“Another month, another consensus-beating Eurozone PMI-report. The March composite PMI rose further to 54.1 from 53.3 last month, according to flash estimates. The services sector continues to lead the way, rising to 54.3 from 53.7. Helped by a weaker euro and cheap energy, Eurozone manufacturers are also increasingly contributing to growth, with the manufacturing PMI rising to 51.9 from 51.0.”
“The German services sector PMI rose to 55.3, putting the winter slump firmly behind it. The French services sector PMI fell back slightly to 52.8, but remains well above the below-50 readings we had gotten used to in the months and years before. It is encouraging to see the French services sector expanding again: finally at least one engine of the French economy has fired up again. The services sector PMI improved in the rest of the Eurozone as well.”
“If the past is any guide, current Eurozone PMIs mean that 0.4% quarterly growth comes within reach in 2015Q1. That would be the strongest quarterly expansion in four years. There is no reason for complacency though.”
“The recovery is helped by record low interest rates thanks to the ECB’s QE, a weakened euro and cheap oil. None of these can or should be taken for granted.”
“Moreover, PMI details show the uneven nature of the recovery, with French manufacturing especially lagging behind.”
“With the ECB’s pedal already to the metal, there is work to do in several European capitals to strengthen Europe's growth potential.”
Key Quotes
“Another month, another consensus-beating Eurozone PMI-report. The March composite PMI rose further to 54.1 from 53.3 last month, according to flash estimates. The services sector continues to lead the way, rising to 54.3 from 53.7. Helped by a weaker euro and cheap energy, Eurozone manufacturers are also increasingly contributing to growth, with the manufacturing PMI rising to 51.9 from 51.0.”
“The German services sector PMI rose to 55.3, putting the winter slump firmly behind it. The French services sector PMI fell back slightly to 52.8, but remains well above the below-50 readings we had gotten used to in the months and years before. It is encouraging to see the French services sector expanding again: finally at least one engine of the French economy has fired up again. The services sector PMI improved in the rest of the Eurozone as well.”
“If the past is any guide, current Eurozone PMIs mean that 0.4% quarterly growth comes within reach in 2015Q1. That would be the strongest quarterly expansion in four years. There is no reason for complacency though.”
“The recovery is helped by record low interest rates thanks to the ECB’s QE, a weakened euro and cheap oil. None of these can or should be taken for granted.”
“Moreover, PMI details show the uneven nature of the recovery, with French manufacturing especially lagging behind.”
“With the ECB’s pedal already to the metal, there is work to do in several European capitals to strengthen Europe's growth potential.”