Markets to focus on Eurozone’s February PMI after January’s mixed results

The Eurozones January composite PMI dropped 0.8pt to 53.5, however, it is still consistent with the GDP growth as it is slightly below a 2 percent pace. The latest figures increase pressure on February release, as markets expected the print to put the economy back on track. The economy is likely to get support from declining oil prices and improving credit channel as it is seen steady, according to bank lending report.

The global backdrop, as a result, is more uncertain as the details of the PMI release were mixed, as business expectations in services improved significantly, while the composite employment index was unchanged at a four-and-a-half-year high, while the backlog of work edged up further.

In manufacturing, the output index dropped 1.3pts to 53.2, with new orders and backlog of work falling 1.1pts to 53.1 and 0.9pt to 51.1 respectively, while the orders inventory ratios declined slightly. German new export orders decreased 1.7pts to 51.8; however, it was higher as compared to previous months.