Recovery in eurozone activity likely from March onwards: UniCredit

Quotes from UniCredit Research:

- February manufacturing PMIs showed weaker growth in Central Europe and extended the contraction of industrial production in Russia and Turkey. However, the picture is better than painted by the headline numbers in Central Europe and Turkey.

- Export orders grew at a slower pace in Poland and the Czech Republic, but a rise in eurozone PMIs points at industrial production re-accelerating from March onwards. This is confirmed by other PMI sub-indices that continued to strengthen in February: higher domestic orders, higher input purchases and lower stocks of finished goods. Activity continued to strengthen in Hungary, with exports, orders and output growth accelerating in February. This could reflect a delayed rebound from a disappointing 4Q14.

- The rebound in input prices signaled that the pass-through from lower fuel prices to production prices is coming to an end. This could help consumer price inflation trough in 1Q15. Adding stronger demand pressure on prices, headline inflation could return gradually above 0% by 4Q15. This is good news for central banks, which face the conundrum of low inflation and accelerating growth.