Trade Desk Thoughts - Euro-Area Final Services PMI

Euro-area Final Services PMI Actual 48.4, Expected 48.2, Previous 48.2

Release Explanation: Measures the activity level of Purchase Managers, they are surveyed on production, employment, inventories, orders, delivery data. The PMI is split into reads on Manufacturing, Service, and Construction industries. A read over 50 denotes growth. As an indicator of economic performance the PMI has the ability to easily affect currency valuations as Institutions re-align existing positions, or build new, on the strength of these reports.

Trade Desk Thoughts: The service side of the economy in the Euro-area has been in contraction for the last four months according to the latest PMI release. The released number of 48.4 is near a five year low and the economy is struggling to show any sign of growth amid the global slowdown. The release puts additional pressure on the ECB to cut interest rates at the next meeting as both the service and manufacturing sectors are contracting.

Forex Technical Reaction: The Euro is trading just above the neutral pivot point, after it gained 55 pips during the overnight session.

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