24 Oct 2013
Flash: Euro area challenges coming up? – BBH
FXstreet.com (London) - Research teams note current environment for the euro with complaints coming in around a strong euro.
Key Quotes:
“The flash euro area PMI readings for September came in on the lower end of expectations. Although the sentiment readings have been running ahead of real sector data, slight positive growth has replaced the recent contraction. The euro zone Composite reading came in at 51.5 (expected at 52.4), with the manufacturing component at 51.4 (expected at 51.3) and the services at 50.9 (expected at 52.2). Of note, France’s manufacturing PMI failed to live up to expectations for a print over 50, instead declining to 49.4. Also, French services PMI came in well below expectations at 50.2. Meanwhile, Germany’s manufacturing PMI came in as expected at 51.5, but the services component disappointed at 52.3 (expected at 53.7)”.
“After the break of $1.38, the euro may enjoy additional near-term gains, but it will serve to aggravate the tightening of financial conditions (lending, money supply growth)”.
“We see euro area challenges once again rising in importance to investors. Indeed, French Minister Montebourg has already started complaining this week about a strong euro. Later today, France reports September jobseekers. The euro is outperforming today, leading the EUR/GBP cross higher to test the 200-day MA near .8535. Break would open up a test of the .8600 area”.
Key Quotes:
“The flash euro area PMI readings for September came in on the lower end of expectations. Although the sentiment readings have been running ahead of real sector data, slight positive growth has replaced the recent contraction. The euro zone Composite reading came in at 51.5 (expected at 52.4), with the manufacturing component at 51.4 (expected at 51.3) and the services at 50.9 (expected at 52.2). Of note, France’s manufacturing PMI failed to live up to expectations for a print over 50, instead declining to 49.4. Also, French services PMI came in well below expectations at 50.2. Meanwhile, Germany’s manufacturing PMI came in as expected at 51.5, but the services component disappointed at 52.3 (expected at 53.7)”.
“After the break of $1.38, the euro may enjoy additional near-term gains, but it will serve to aggravate the tightening of financial conditions (lending, money supply growth)”.
“We see euro area challenges once again rising in importance to investors. Indeed, French Minister Montebourg has already started complaining this week about a strong euro. Later today, France reports September jobseekers. The euro is outperforming today, leading the EUR/GBP cross higher to test the 200-day MA near .8535. Break would open up a test of the .8600 area”.