On Friday we have witnessed a slowdown on Eurozone economic growth, where services PMI figures were released and almost all missed the forecast. Composite PMIs for Germany, France and Spain all fell from March readings while France’s held steady. According to Reuters, EU business growth has faded in April, however the picture remained relatively bright with new businesses remaining strong and firms managing to accumulate work. Nevertheless, what worries the ECB policymakers at this point is the ease of inflationary pressures and a hint of further easing in the coming months. The HIS Markit’s final composite purchasing managers index, which is observed as a good indicator of the Eurozone growth, fell to a 15 month low in April, and according to chief business economist at HIS Markit, Chris Williamson, in spite of the drop, the PMI is not yet at a level that should worry the investors, however the survey does indicate a further easing in the next few months.
The debate between the European Central Bank policymakers if they should end the central banks 2.55 trillion euro asset purchase scheme is now in question as the weakening inflation can make it more difficult to curb stimulus. As per the poll conducted last month by Reuters, the though is that the ECB would most probably end the stimulus this year and have interest rate hikes in the coming year.
Furthermore, the industry data has shown on Friday that retail sales in the Eurozone came less than expected in March, rising 0.1% from a 0.3% gain in the previous month, while the analysts have expected the retail sales to rise to 0.5%.
From the US, investors were eager to see the results of the non-farm payroll and the unemployment claims. According to the official data released on Friday, the NFP rose by 164,000 in April, which was lower than the expected 190,000. However, on the positive side, jobless rate fell to 3.9% from 4.1%, making April’s reading the lowest since 2000. Average hourly earnings came at 0.1% from expected 0.2%, and over the year the average hourly earnings had an increase of 2.6% or 67 cents.
Today we have ahead a very quiet trading day, with no high impact news coming either from the Eurozone, Asia or the US.
ECONOMIC CALENDAR EVENTS FOR MAY 7th
EUR German Factory Orders m/m
EUR Retail PMI
CHF Foreign Currency Reserves
CAD Gov Council Member Lane Speaks
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