Eurozone Preliminary Manufacturing PMI drops to 48.5 in February vs. 49.3 expected

• Eurozone Manufacturing PMI arrives at 48.5 in February vs. 49.3 expected.
• Bloc’s Services PMI rises to 53.0 in February vs. 51.0 expected.
• EUR/USD extends losses toward 1.0650 on the mixed Eurozone PMIs.

The Eurozone manufacturing sector downturn continued in February, the latest manufacturing activity survey from S&P Global research showed on Tuesday.

The Eurozone Manufacturing Purchasing Managers Index (PMI) arrived at 48.5 in February vs. 49.3 expected and 48.8 previous. The index reached a two-month bottom.

The bloc’s Services PMI stood at 53.0 in February vs. 51.0 estimates and January’s 50.8, hitting an eight-month high.

The S&P Global Eurozone PMI Composite jumped to 52.3  in February vs. 50.6 estimated and 50.3 last. The gauge recorded a new nine-month high.

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

“Business activity across the eurozone grew much faster than expected in February, with growth hitting a nine-month high thanks to resurgent service sector activity and a recovering manufacturing economy. February’s PMI is broadly consistent with GDP rising at a quarterly rate of just under 0.3%.”

“Growth has been buoyed by rising confidence as recession fears fade and inflation shows signs of peaking, though manufacturing has also benefitted from a major improvement in supplier performance.”

FX implications

EUR/USD remains pressured toward 1.0650 following the release of the Eurozone PMIs. The spot is losing 0.16% on the day.