Depressing eurozone and German prints below. The eurozone composite was bleakly steady at 46.5 while the German comp hit 48.8 from 50.6 in March — its worst level in six months. The only real good news is that this might increase the chances of an ECB refi cut in the near future.
But since France came out first….
Being punched in the face is better than being punched in the crotch, we suppose.
From Markit’s Jack Kennedy:
The downturn in French private sector output eased in April from March’s four-year record, but nonetheless remained sharp. Accelerated job shedding and an ongoing squeeze on output prices also highlight the pressures facing firms amid a tough economic backdrop. It still appears to be a difficult slog that lies ahead.
The French release is here with the German and eurozone flash PMIs making their appearances before 0900.
Updating as we go:
Here’s Germany’s rather dour readings which must, at the margin, increase the chances of an ECB rate cut in May. For reference Barc had expected a rebound.
The euro’s journey this morning tells its own tale:
Release here
And finally, the eurozone. It’s flat on last month but there’s a drop in activity for the nineteenth time in the past 20 months. Perpetually Miserable Indices indeed.
From Chris Williamson, Chief Economist at Markit:
Although the PMI was unchanged in April, the survey is signalling a worrying weakness in the economy at the start of the second quarter, with signs that the downturn is more likely to intensify further in coming months rather than ease.
Thanks to an upturn in the survey at the start of the year, the PMI suggests that euro area GDP fell by around 0.2-0.3% in the first quarter after a 0.6% drop at the end of last year. However, the April reading points to a 0.4% rate of decline, with downside risks. Worryingly, the rate of loss of new business gathered further momentum, suggesting that activity and employment could fall at steeper rates in May.
The renewed decline in Germany will also raise fears that the region’s largest growth engine has moved into reverse, thereby acting as a drag on the region at the same time as particularly steep downturns persist in France, Italy and Spain.
Policymakers will at least be relieved to see inflationary pressures cooling, which could further open the door to renewed policy stimulus.
Related link:
France should shun talk of revolution – FT