Eurozone PMI Manufacturing from 46.5 to 45.7 in March, below expectation of 47.0. PMI services, on the other hand rose from 50.2 to 51.5, above expectation of 50.5 a 9-month high. PMI Composite ticked up from 49.2 to 49.9, also a 9-month high.
Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, highlighted the “clear weakness” in manufacturing, attributing it largely to Germany’s industrial performance. On a brighter note, the further expansion in the services PMI is considered a “positive development.”
From a monetary policy perspective, ECB may find some solace in the report’s implications on inflationary pressures. Notably, the services sector, which is typically sensitive to wage dynamics, has not seen a further escalation in price pressures.
However, these developments, as de la Rubia notes, are “not enough” to alter the ECB’s tentative plan to commence rate cuts in June, rather than an earlier move in April.
Also released, France PMI Manufacturing fell from 47.1 to 45.8. PMI Services fell from 48.4 to 47.8. PMI Composite fell from 48.1 to 47.7.
Germany PMI Manufacturing fell from 42.5 to 41.6. PMI Services rose from 48.3 to 49.8. PMI Composite rose from 46.3 to 47.4.
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Full Eurozone PMI release here.
Australia’s Westpac consumer sentiment dips -1.8% mom, RBA triggers sharp decline
In March, Westpac Consumer Sentiment Index in Australia dropped by -1.8% mom to 84.4. This downturn is attributed to renewed concerns about the near-term economic outlook, with fears regarding inflation and interest rate hikes only easing marginally.
The survey revealed a significant shift in sentiment in responses to the RBA’s latest policy decision. Sentiment scores were markedly higher at 94.9 for those surveyed before the decision, compared to a lower 79.3 for those surveyed afterwards.
The persistence of consumer concerns, notably regarding inflation and interest rates, was evident. Many had harbored hopes for a more reassuring update from RBA on these fronts. Yet, the central bank’s governor did not entirely dismiss the prospect of additional rate hikes. This stance likely contributed to dampening consumer sentiment, as individuals grappled with the implications for personal finances and economic conditions at large.
Full Australia Westpac consumer sentiment release here.