Eurozone: PMI manufacturing falls to four-month lows in March, services sector strengthens at its best pace since May 2022

The index Eurozone manufacturing PMI has fallen in the preliminary March reading to 47.1 points from 48.5 in February, its lowest figure in four months. The result disappoints the expectations of the market, which expected an increase to 49 points.

He Services PMI is up almost three points, standing at 55.6 in March compared to the 52.7 of the previous month, exceeding the 52.5 estimated by the consensus. This is the best reading recorded by the indicator in ten months.

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, notes: “The eurozone economy is showing new signs of life as we enter spring, with business activity growing at its fastest pace in ten months in March. The survey is consistent with GDP growth of 0.3% in the first quarter, accelerating to a rate equivalent to 0.5% in March alone. Growth has picked up from late last year lows as recession fears and energy market concerns fade. Inflationary pressures ease and unprecedented supply chain delays seen during the pandemic are replaced with record improvements in supplier delivery times. The business confidence is also showing encouraging resilience so far before new interest rate rises and the uncertainty caused by the recent tensions in the banking sector”.

EUR/USD reaction

EUR/USD has continued to extend its decline below 1.0800 (started prior to the data) and has bottomed out at 1.0768, a fresh two-day low. At time of writing, the pair is trading above 1.0782, losing 0.45% daily.