EUROZONE DATA: Worth Monitoring Labour Cost Increases In Feb Services PMIs
Mar-05 09:10
The Eurozone-wide services PMI saw a small downward revision to 50.6 (vs 50.7 flash, 51.3 prior), with a downward revision in Germany outweighing a smaller upward revision in France. The Spanish and Italian prints were stronger than consensus expectations, but this doesn’t necessarily imply an upward revision to the flash reading.
- A key theme in the services PMIs across the four major Eurozone economies were increased input costs, largely driven by labour costs. These cost increases were passed into output charges, most notably in Spain and Italy.
- The ECB has expressed considerably confidence in the 2025 compensation outlook (which should help drive disinflation in services), so these signals from the PMI are worth monitoring over the coming months.
- Meanwhile, services employment increased in Germany, Spain and Italy, but fell in France.
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BUNDS: Curves Steepen Towards Next Upside Levels
Feb-03 09:08
The dovish repricing linked to tariff-related growth worry promotes bull steepening on the German curve this morning.
- 2s10s within 0.5bp of the October 21 ’22 high (36.7bp).
- 5s20s ~3bp off the ’24 treble top area (~51.1bp).
- Levels above are based on closing prices.
EURIBOR OPTIONS: More Call Flow
Feb-03 09:03
Continued flow in Euribor calls, although a little more mixed this time around:
- ERM5 97.9375/98.1875 call spread 4K given at 7.25.
- ERU5 98.25/98.4375 call spread paper paid 4.25 on 7K vs 98.035, 13% delta.
MNI: EUROZONE FINAL JAN MANUF PMI 46.6 (FLASH: 46.1); DEC 45.1
Feb-03 09:00
- MNI: EUROZONE FINAL JAN MANUF PMI 46.6 (FLASH: 46.1); DEC 45.1
