German Preliminary Manufacturing PMI drops to 54.1 in April vs. 54.5 expected

• German Manufacturing PMI arrives at 54.1 in April vs. 54.5 expected.
• Services PMI in Germany jumps to 57.9 in April vs. 55.5 expected.
• EUR/USD is trading near lows just above 1.0800 on mixed German PMIs.

The German manufacturing sector slowed its pace of expansion but the services sector fared well in April, the preliminary manufacturing activity report from S&P Global/BME research showed this Friday.

The Manufacturing PMI in Eurozone’s economic powerhouse came in at 54.1 this month vs. 54.5 expected and 56.9 prior. The index hit 20-month lows.

Meanwhile, Services PMI jumped from 56.1 booked previously to 57.9 in April as against 55.5 estimated. The PMI clocked the highest level in eight months.

The S&P Global/BME Preliminary Germany Composite Output Index arrived at 54.5 in April vs. 54.1 expected and March’s 55.1. The gauge reached three-month troughs.

Key comments from Phil Smith, Economics Associate Director at S&P Global

“We’re seeing a growing divergence in the performance of Germany’s manufacturing and service sectors.”

“Whilst services activity continues to build momentum thanks to the easing of COVID restrictions and the subsequent release of pent-up demand, manufacturing production has fallen into contraction amid a combination of renewed supply disruption and cooling demand for goods.”

FX implications

EUR/USD is holding the lower ground just above 1.0800, losing 0.19% on the day. The spot remains weighed down by resurgent US dollar demand and mixed German data.