Trade Desk Thoughts - Euro-Area Manufacturing PMI

Euro-area Manufacturing PMI Actual 45.0, Expected 45.3, Previous 45.3

Release Explanation: 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. It 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.

Trade Desk Thoughts: The PMI release shows the euro-area manufacturing side of the economy contracted for the fourth consecutive month. The release number of 45.0 is slightly smaller than analyst expectations of 45.3. It is thought that the strong euro recently together with the tightening cycle of the ECB contributed to the poor reads from the last few periods

Forex Technical Reaction: The euro was unmoved by the release. The pair moved 25 pips tonight, reflecting the strong selling pressure from the last days of trading.

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