Manufacturing Weakness Persists Eurozone
Eurozone HCOB Composite PMI edges higher to 51.2 in September
Economic activity in the Eurozone’s private sector expanded at a modest pace in early September, with the preliminary HCOB Composite Purchasing Managers’ Index (PMI) edging slightly higher to 51.2 from 51.0 in August.
Commenting on the survey, Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank (HCOB), said: “Cost inflation in the services sector, which the European Central Bank monitors closely, has eased slightly but remains unusually high given the fragile economic backdrop. Selling prices have cooled more noticeably, which might just prompt the ECB to consider whether a rate cut before year’s end could be back on the table.”
The EUR/USD pair came under modest bearish pressure following the mixed PMI data, last seen down 0.12% on the day at 1.1788. The Euro was weakest against the British Pound in today’s currency heat map.
Germany’s preliminary PMI data also painted a mixed picture:
The modest rise in the Eurozone Composite PMI, alongside weakness in manufacturing and persistent cost pressures in services, leaves the European Central Bank in a delicate position. While easing selling prices may open the door to potential rate cuts, elevated input costs remain a challenge.
The 14-day RSI remains above 50, supporting a short-term bullish bias.
Meanwhile, in the United States, markets remain cautious ahead of the release of S&P Global PMI data and a scheduled speech by Federal Reserve Chair Jerome Powell. The Federal Reserve recently cut rates by 25 basis points and signaled two more cuts this year.
Separately, the Supreme Court of the United States has scheduled hearings on the legality of sweeping tariffs imposed by the President of the United States. A lower court had previously ruled that the President exceeded authority in imposing most of the tariffs under emergency powers. The tariffs remain in effect during the appeal process, keeping investors on edge.