Eurozone Preliminary Manufacturing PMI misses estimates with 54.4 in May

• Eurozone Manufacturing PMI arrives at 54.4 in May vs. 54.9 expected.
• Bloc’s Services PMI falls to 56.3 in May vs. 57.5 expected.
• EUR/USD falls off the highs on the downbeat Eurozone PMIs.

The Eurozone manufacturing sector expansion fell short of expectations in May, the latest manufacturing activity survey from S&P Global research showed on Tuesday.

The Eurozone Manufacturing purchasing managers index (PMI) arrived at 54.4 in May vs. 54.9 expectations and 55.5 last. The index hit a two-month top.

The bloc’s Services PMI dropped sharply to 56.3 in May vs. 57.5 expected and 57.7 previous. The indicator registered two-month lows.

The S&P Global Eurozone PMI Composite fell to 54.9 in May vs. 55.3 estimated and 55.8 previous. The gauge reached the lowest level in two months.

Comments from Chris Williamson, Chief Business Economist at S&P Global

“The eurozone economy remained encouragingly resilient growth in May, as a beleaguered manufacturing sector was offset by a buoyant service sector.“

“Although factories continue to report widespread supply constraints and diminished demand for goods amid elevated price pressures, the economy is being boosted by pent-up demand for services as pandemic-related restrictions are wound down. May saw a further surge in spending on tourism and recreation in particular.”

FX implications

EUR/USD ticks a few pips lower from daily highs of 1.0736 on dismal Eurozone PMIs. The pair was last seen trading at 1.0722, still up 0.33% on the day.