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Eurozone economic growth resilient at the start of 2017 - PMI

IHS Markit's Euro Zone Flash Composite Purchasing Managers' Index showed that euro area economic growth remained resilient at the start of 2017. Composite Purchasing Managers' Index, which is a good overall growth indicator fell slightly from December's five-year high of 54.4 to 54.3, but remained above the 50-point line.

Eurozone PMI missed expectations for a rise to 54.5. The marginal fall in PMI is consistent with a quarterly pace of GDP growth of 0.4 percent to 0.5 percent, said Lloyds Bank in a report.

Details of the report showed manufacturing PMI increased for a fifth consecutive month to 55.1, the highest level since 2011, with export orders supported by a favourable euro exchange rate. Services PMI, meanwhile, edged down to 53.6 from 53.7.

A sub index measuring prices charged spent its third month above the break-even mark although it ticked down to 51.6 from December's 51.7, which was the highest since July 2011. The  European Central Bank has been struggling to prop inflation and signs of ongoing inflationary pressures will be welcomed by policymakers.

New export orders held steady at last month's 54.8, the highest reading since the start of 2014. The new business index rose to 53.6 from 53.5, its highest in a year. An index measuring output nudged down to 55.9 from December's 32-month high of 56.1.

"Some indices are showing some particularly encouraging signs. The employment index was at its highest since February 2008 so a clear indication firms are expanding at a rate we have not seen since the global financial crisis," said Chris Williamson, chief business economist at IHS Markit.

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