Japan's Manufacturing Growth Eases In February

Lloyd Doyle
February 21, 2018

The German bunds jumped during early European session Wednesday as investors wait to watch the country's manufacturing as well as services PMI for the month of February, both scheduled to be released today by 08:30GMT respectively.

An index measuring output, which feeds into the composite PMI, sank to a four-month low of 59.5 from 61.1.

A purchasing managers' index (PMI) by Markit data monitoring company IHS Markit fell to 57.5 in February from 58.8 in January.

Adding to suggestions the strong euro may be having an effect, the export orders index - which does include trade within the bloc - fell to a seven-month low of 56.8 from 58.4.

The Flash U.S. Manufacturing PMI Index rose to a 40-month high, coming in at 55.9 in Feburary from 55.5 last month.

A closely monitored survey of the private sector found activity cooling during the month but still remaining near levels not seen since before the global financial crisis over a decade ago.

Analysts at Markit said that despite the slight slowdown, the eurozone was on course for its best quarter for nearly 12 years.

The manufacturing PMI dropped to 58.5 from 59.6, again matching the lowest forecast in a Reuters poll, against a consensus forecast of 59.3. The PMI readings for the first two months of the quarter generally provide a reliable guide to official GDP growth, and indicate that the eurozone economy is expanding at a quarterly rate of 0.9% in the opening quarter of 2018. "However, a rise in business optimism about the year ahead to a joint-survey high bodes well, suggesting that companies are expecting the slowdown to be short-lived".

"It is still a very elevated level", said Chris Williamson, chief business economist at IHS Markit. Indeed, further yen strengthening will create unwanted drag on inflationary pressures.

Other reports by Iphone Fresh

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