Eurozone Preliminary Manufacturing PMI beats estimates with 58.5 in October

• Eurozone Manufacturing PMI arrives at 58.5 in October vs. 57.0 expected.
• Bloc’s Services PMI drops to 54.7 in October vs. 55.5 expected.

The Eurozone manufacturing sector activity improved in the reported month, the latest manufacturing activity survey from IHS/Markit research showed on Friday.

The Eurozone Manufacturing purchasing managers index (PMI) arrived at 58.5 in October vs. 57.0 expectations and 58.6 last. The index hit eight-month lows.

The bloc’s Services PMI dropped to six-month lows of 54.7 in October vs. 55.5 expected and 56.4 previous.

The IHS Markit Eurozone PMI Composite fell to 54.3 in October vs. 55.2 estimated and 56.2 previous. The gauge also clinched six-month lows.

Comments from Chris Williamson, Chief Business Economist at IHS Markit

“A sharp slowdown in October means the eurozone starts the fourth quarter with the weakest growth momentum since April. A manufacturing sector beset with supply chain delays saw production growth falter to the lowest since the first lockdowns of last year.”

“The services sector has meanwhile seen some of the summer rebound fade just as resurgent virus case numbers bring renewed concerns, notably in Germany. These worries have once again hit the consumer-facing travel, tourism and recreation sectors in particular.”

FX implications

EUR/USD is holding the higher ground, unfazed by the mixed German and Eurozone Business PMIs, as it continues to benefit from the US dollar weakness.

The spot currently trades at 1.1642, up 0.18% on the day, although slightly off from the daily highs of 1.1647.