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16 Dec 2014
Higher euro PMIs and German ZEW expectations – Danske
FXStreet (Barcelona) - The Danske Bank Research Team notes that the Eurozone area PMIs came out higher than expected in December, and the German ZEW expectations increasing to 31.8, the highest level since May, indicating towards a strong German economy in 2015.
Key Quotes
“Euro area flash PMIs increased in December and were slightly stronger than consensus expectations. The improvement in PMIs was broadly in line with our expectations and confirms our view that growth in the euro area will slowly strengthen in 2015 after it lost momentum during 2014.”
“The euro composite PMI new orders increased to 50.9 in December from 49.7 in November. The improvement followed after it had declined each month since June, and we believe it will trend higher in coming months, along with other signs of improvement in business climate indicators.”
“The manufacturing PMI increased to 50.8 in December from 50.1 in November. Both new orders and new export orders improved, but the overall increase in new orders was mainly due to domestic demand as new export orders strengthened less”
“In Germany, the manufacturing PMI increased to 51.2 in December from 49.5 in November, but the service PMI continued lower to 51.4 in December from 52.1 in November after it peaked at 56.7 in June.”
“German ZEW expectations were also released today, increasing to 31.8 from 11.5, and they are now at the highest level since May, reflecting that a large share expect future improvement. The increase in ZEW expectations also suggests that the IFO expectations due for release on Thursday will be higher in December.”
“We expect the German economy will strengthen in 2015 and look for GDP growth of 1.9% up from 1.5% in 2014.”
Key Quotes
“Euro area flash PMIs increased in December and were slightly stronger than consensus expectations. The improvement in PMIs was broadly in line with our expectations and confirms our view that growth in the euro area will slowly strengthen in 2015 after it lost momentum during 2014.”
“The euro composite PMI new orders increased to 50.9 in December from 49.7 in November. The improvement followed after it had declined each month since June, and we believe it will trend higher in coming months, along with other signs of improvement in business climate indicators.”
“The manufacturing PMI increased to 50.8 in December from 50.1 in November. Both new orders and new export orders improved, but the overall increase in new orders was mainly due to domestic demand as new export orders strengthened less”
“In Germany, the manufacturing PMI increased to 51.2 in December from 49.5 in November, but the service PMI continued lower to 51.4 in December from 52.1 in November after it peaked at 56.7 in June.”
“German ZEW expectations were also released today, increasing to 31.8 from 11.5, and they are now at the highest level since May, reflecting that a large share expect future improvement. The increase in ZEW expectations also suggests that the IFO expectations due for release on Thursday will be higher in December.”
“We expect the German economy will strengthen in 2015 and look for GDP growth of 1.9% up from 1.5% in 2014.”