Deceleration unlikely in Euro area manufacturing PMI

Euro area  manufacturing PMI for October is scheduled to release today. French PMIs continue to paint a poorer picture than the Bank of France and INSEE survey counterparts, both of which use larger samples and are as such more reliable. The Spanish figure should remain unchanged from September at 51.7, while a solid increase in Italian PMI is likely from 52.7 to 53.5, as the manufacturing sector in both countries is holding up well. The German number for October is set to remain unchanged at 51.6 signalling an end to the downtrend seen since the final August release (53.3).

"The final euro-area manufacturing PMI is expected to confirm the flash estimate of 52.0 (and also to match the September figure) as manufacturing activity has remained resilient. Looking at the country by country breakdown, a slight rise in the flash figure (50.7 to 50.9) is likely in France as weak upward momentum seen previously is set to continue - albeit from a lower base", says Societe Generale. 

Looking ahead, the PMIs are expected to continue around current levels in the coming months, consistent with our view that economic activity will remain firm in the next quarters (close to 0.4% qoq). However, the risks to manufacturing activity still remain tilted to the downside in the near term.