Eurozone Preliminary Manufacturing PMI beats estimates with 58.0 in December

• Eurozone Manufacturing PMI arrives at 58.0 in December vs. 57.8 expected.
• Bloc’s Services PMI drops to 53.3 in December vs. 54.1 expected.

The Eurozone manufacturing sector activity increased more than expected in the reported month, the latest manufacturing activity survey from IHS/Markit research showed on Thursday.

The Eurozone Manufacturing purchasing managers index (PMI) arrived at 58.0 in December vs. 57.8 expectations and 58.4 last. The index hit 10-month lows.

The bloc’s Services PMI dropped to eight-month troughs of 53.3 in December vs. 54.1 expected and 55.9 previous.

The IHS Markit Eurozone PMI Composite eased to 53.4 in December vs. 54.0 estimated and 55.4 previous. The gauge reached the lowest in nine months.

Comments from Chris Williamson, Chief Business Economist at IHS Markit

“The eurozone economy is being dealt yet another blow from COVID-19, with rising infection levels dampening growth in the service sector, in particular, to result in a disappointing end to 2021. Germany is being especially hard hit, seeing the economy stall for the first time in a year-and-a-half, but the growth slowdown is broad-based across the region.”

“Encouragement comes from the manufacturing sector, where the strain on supply chains is showing some signs of easing, in turn helping to revive factory production. Most notably autos production has risen for the first time since August.”

FX implications

EUR/USD is trading close to the daily highs of 1.1319 despite the mixed German and Eurozone Business PMIs, as it finds some comfort from the persistent weakness in the US dollar.

The spot currently trades at 1.1314, up 0.25% on the day.