EUROZONE DATA: Aug Services/Composite PMI: German Revision Pulls Services Down
The Eurozone final August services PMI was revised down a touch to 50.5 (vs 50.7 flash, 51.0 prior). This was mostly driven by Germany, which saw its services reading revised down to 49.3 (vs 50.1 flash). The composite reading was essentially unchanged from the flash at 51.0 (vs 51.1 flash, 50.9 prior) - a one-year high.
- We estimate the France/Germany services PMI at 49.5 (vs 49.9 flash, 49.7 prior). Meanwhile, the ex-France/Germany measure also softened to 52.2 (vs 52.0 flash, 53.2 prior).
- The details of the Eurozone-wide report didn’t add much new relative to the flash, and the data has unsurprisingly had little impact on market pricing.
- From the report:
- Composite:" While the pace of expansion ticked up to a one-year high, it remained sluggish overall. The service sector held back overall growth, with output rising only marginally. Nevertheless, for the first time since May 2024, private sector firms reported greater volumes of incoming new work and employment growth was its quickest in 14 months"
- Services: “ Business expectations were optimistic as companies anticipated higher activity over the coming 12 months. The overall level of positive sentiment was down fractionally on the month and remained below its long-term average”.
- Services: “Inflationary pressures picked up across the euro area service sector. Input cost inflation rose to a three-month high, while charges increased at the fastest pace since March”
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FOREX: FX OPTION EXPIRY - Watch AUD on Friday
Of note:
EURUSD 6.01bn at 1.1550/1.1600 (could act as magnet).
EURUSD 4.57bn at 1.1550/1.1600 (tue).
EURUSD 1.1bn at 1.1500 (thu).
USDJPY 1.12bn at 148.50 (thu).
AUDUSD 4.12bn at 0.6500 (fri).
EURUSD 1.52bn at 1.1500 (fri).
EURGBP 2.4bn at 0.8675/0.8700 (fri).
- EURUSD: 1.1500 (1.61bn), 1.1510 (586mln), 1.1550 (2.15bn), 1.1560 (626mln), 1.1565 (992mln), 1.1575 (375mln), 1.1585 (671mln), 1.1600 (1.2bn).
- USDJPY: 147.50 (350mln), 147.80 (387mln), 148.50 (246mln).
- USDCAD: 1.3790 (451mln).
- USDCNY: 7.1500 (450mln).
EQUITIES: Indices are pulling away from Friday's lows
- European and US Equities are pulling away from Friday's lows, the Estoxx futures plummeted 5% from just Thursday's high to Friday's low, VGU5 is now up 0.77%.
- Looking at a Micro level, the Index is close to where it was trading at pre NFP, although we noted at the time of the Employment release the surprising lack of moves in Equities versus what was witnessed in Bonds, Rates and FX.
- This was most likely because of the already big sell off seen in Equities since Thursday into Friday's Data.
- VGU5 was trading at 5234.00, which is right here, and for the US Emini, it was trading at 6320.00, but fell 3.54% from last Thursday's high at 6468.50.
SWITZERLAND DATA: Transport Services Dragged Up July CPI Print
Looking at the details of the Swiss CPI print, upside momentum from transport and recreation categories stands out (contributing a combined 0.21pp more than in June). Overall it remains that this was the second consecutive positive print in Swiss CPI.
⦁ Transport services (airfares but also "public transport abroad" in particular) and package holidays (part of recreation category) were behind the acceleration here, having seen higher Y/Y prints this time - that might help explain parts of the unusual higher services / imported inflation combination.
⦁ Food inflation meanwhile has fallen this time, contributing 0.06pp less than in June.
⦁ Further details see table / chart below:
