Eurozone PMI slows in January and shows continued slack in inflation – ING

By FXStreet FXStreet (Delhi) – Bert Colijn, Research Analyst at ING, notes that the Eurozone economy has started the year on a disappointing note, as the Eurozone PMI fell from 54.3 to 53.5 in January.

Key Quotes

“This shows that the slowdown in emerging markets and financial market turmoil is affecting the economy somewhat, but not enough to significantly slow down growth yet. Especially encouraging are the labour market improvements that businesses indicate, which hints at more domestic demand driven growth in the months ahead as external factors remain uncertain.

Indeed, businesses were upbeat about the future as especially firms in the service sector expect a strong rise in future activity levels. This shows that while consumers and the ECB are spooked by the current turmoil in markets, European businesses remain upbeat about the months ahead.

The survey also indicated that businesses have continued to cut prices in January, indicating that the lower energy prices are being passed onto the consumer. This means that the inflation outlook remains very subdued for the moment. After yesterday’s dovish remarks by ECB president Mario Draghi, this will add pressure on the ECB to act in March.

The German PMI decreased amidst the global unrest and financial market turmoil, but …read more

Source:: FX Street