Eurozone Oct Services, Composite PMIs revised slightly higher to 55.0 and 56.0 from 54.9 and 55.9 respectively, despite the fact that German and French services PMI readings were revised slightly down. The Services PMI still dropped sharply compared to the 53.8 in the previous month and the composite PMI also fell back compared to the 56.7 reported in September. Nevertheless a robust start to the last quarter of the year, with ongoing strong growth and capacity constraints in the manufacturing sector. Survey compiler Markit highlighted that while “the rate of output growth eased slightly, it remained among the fastest registered over the past six-and-a-half years, while the pace of job creation was the best in over a decade”, with inflows of new business the strongest since April 2011. With the ECB continuing to add stimulus next year, monetary policy will fuel the recovery well into 2018 and at least in the manufacturing sector underlying price pressures are starting to emerge.
EURUSD picked up from from morning lows under 1.1600, the new psychological support level, and remains significantly lower following Fridays NFP and PMI data.
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