PMI data could not draw a bright future for European
Earlier today, all eyes in Europe were on purchasing managers' index numbers to see what we can expect from different sectors and their outlook.
According to the data published by S&P Global on Thursday, Eurozone composite PMI fell to 51.9 from 54.8, while the biggest Eurozone economy also saw the same weakness. German composite PMI also fell to 51.3 from 53.7 to confirm how private sector activity grew softer and raised the recession fears for the Eurozone area. These data will be more disappointing when we see that expectations from the European Central bank to increase the interest rates are increasing. The weakness in composite numbers came after the manufacturing and service sectors. None of the estimated numbers in the Service or manufacturing sectors in the developed European economies could be beaten!
On the USD front, while we are waiting for the same PMI data from the US, we also should follow the FED Chair Powell's testimony in the Senate. Yesterday, his comments increased the overall hawkish estimates to increase the US recession fears and the US dollar demand. For today, it is unlikely that his comments to trigger a significant market reaction.
If we add that the IEA warns European countries about the challenges that they may face later in the energy sector, envisioning a bright future in the short term seems a bit unrealistic to Europeans.
From the technical point of view, as you can see in the bellow figure, as long as EURUSD is trading under 1.08, we should not expect any bullish movement there.
