- Chris Williamson, Chief Economist at Markit
Growth in the Euro zone's both the services and manufacturing sectors slowed in February, casting further doubts over the strength of the currency bloc's recovery. The Euro zone's composite PMI, which measure activity in the manufacturing and services sector, dropped to a 13-month low of 52.7 in February, down from a revised figure of 53.5 in January, coming in below expectations of 53.3. A separate survey showed the Euro zone's manufacturing PMI slid to 51.0 in the current month, compared with 52.3 seen in January. At the same time, the gauge, measuring business activity in the services sector, dropped to 53.0, down from 53.6 in January. The European Central Bank will be concerned about the PMI output price sub-index, which dropped to a one-year low of 48.6, down from 48.9 in January. Inflation was just 0.4% in January. There is an even chance that the central bank will expand its size of its 60 billion euros-a-month asset-buying programme next month, and another deposit rate cut is almost certain, economists say.
Manufacturing activity in Germany rose at a slower pace than in the preceding month. The PMI for the Euro zone's number one economy's industrial sector declined to 50.2 in February, the weakest level in 15 months. In France, however, the gauge booked 50.3 points in the current month, up from 50.0 points in January.
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