Eurozone Preliminary Manufacturing PMI disappoints with 58.4 in February

• Eurozone Manufacturing PMI arrives at 58.4 in February vs. 58.7 expected.
• Bloc’s Services PMI jumps to 55.8 in February vs. 52.0 expected.
• EUR/USD is retreating towards 1.1350 on Kremlin’s statement and mixed PMIs.

The Eurozone manufacturing sector activity expanded but less than expected in February, the latest manufacturing activity survey from IHS/Markit research showed on Monday.

The Eurozone Manufacturing purchasing managers index (PMI) arrived at 58.4 in February vs. 58.7 expectations and 58.7 last. The index hit two-month lows.

The bloc’s Services PMI jumped sharply 55.8 in February vs. 52.0 expected and 51.1 previous. The indicator hit three-month highs.

The IHS Markit Eurozone PMI Composite rose to 55.8 in February vs. 52.7 estimated and 52.3 previous. The gauge reached the highest in five months.

Comments from Chris Williamson, Chief Business Economist at IHS Markit

“The eurozone economy regained momentum in February as an easing of virus-fighting restrictions led to renewed demand for many consumer services, such as travel, tourism and recreation, and helped alleviate supply bottlenecks.”

“Business optimism in the outlook has likewise improved as companies look to the further reopening of the economy, encouraging increased hiring.”

FX implications

Kremlin’s statement has re-ignited the risk-off market sentiment, with the high beta assets paring back gains.

The euro is also bearing the brunt, as EUR/USD extends the retreat from daily highs of 1.1388. The Eurozone data plays a second fiddle amid ongoing Russia-Ukraine geopolitical tensions.

The spot was last seen trading at 1.1364, up 0.41% on the day.