Eurozone November Manufacturing PMI Confirmed At 34-Month High

The final reading of the Markit Eurozone PMI manufacturing index was confirmed at 53.7, unchanged from the flash reading, and the strongest reading for 34 months. This was an increase from 53.5 and in line with market expectations.

Orders increased at the fastest pace since February 2014 with a boost in domestic and export orders, while production growth rose at a slightly slower pace.

Employment growth continued for the month with an increase in staff numbers throughout the countries covered in the survey.

There was a further increase in order backlogs and delivery times also increased, which will support the near-term outlook for production.

Input prices increased at the fastest pace since March 2012 and there was also significant upward pressure on output prices, which registered the sharpest increase in output prices for over five years.

The Netherlands recorded the strongest rate of growth at a 35-month high and there were monthly improvements in Italy and Ireland. There will, however be further concerns surrounding the Greek outlook with a decline to a 12-month low further into contraction territory.

There will be further measured optimism surrounding the manufacturing sector and the inflation readings are potentially the most important aspect within the data. A significantly stronger increase in the pace of output prices will increase speculation that the ECB will pare back the amount of monetary stimulus within the next few months.

EUR/USD held above 1.0600 in narrow ranges, while bunds extended losses. Higher yields were important in undermining equities with the EuroStoxx 50 index declining around 0.65%.

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Tim Clayton

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