Danske Research Team highlights that Euro area April flash PMIs (Purchasing Managers’ Index) are a key input ahead of the next European Central Bank (ECB) meeting, with Manufacturing PMI expected to drop below 50 while Services PMI holds at 50.2. The bank notes unusually high uncertainty around the indices and stresses that price components will be crucial. In markets, EUR/USD has slipped back below 1.1700.
Euro PMIs and weaker currency tone
“In the euro area, the April flash PMI report is released, a key input ahead of the ECB meeting. We expect the manufacturing PMI to show a steep decline from 51.6 to 49.6, driven by higher energy prices.”
“The surprise increase in the headline index in March was largely due to longer delivery times, which pose an upward risk to the headline number again. As such, monitoring the output sub-component will be crucial.”
“The services PMI fell more than expected in March to 50.2 and we expect it to remain at same level in April, as services are less directly hit than manufacturing. However, the uncertainty of the index is unusually high, so interpretation should be more cautious than usual.”
“Markets open on a weak foot with headlines from a locked-in stand-off over the SOH [Strait of Hormuz] dominating the news. Asian equities are down while US treasuries rise a couple of basis points this morning and EUR/USD falls back below 1.1700.”
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Source: https://www.fxstreet.com/news/eur-usd-pmi-signals-and-softer-pair-danske-bank-202604230620
