|
 The sudden drop in the euro zone flash composite Markit Purchasing
Managers' Index (PMI) was driven by sharply slower growth in
manufacturing orders in Germany and France, suggesting recent
optimism about the euro zone may be overdone.
This marks the first major euro zone indicator that has disappointed
all forecasts in quite some time, and comes just a month after the
European Central Bank began purchasing government bonds to stimulate
the economy.
The euro zone composite PMI fell to 53.5 from 54.0, below both the
54.4 consensus and the lowest forecast in a Reuters poll. The
50-point mark separates growth and contraction.
Factory order growth slowed particularly in France, but also in
major goods exporter Germany, and the euro zone's No. 1 economy,
suggesting more subdued activity ahead.
Both the flash manufacturing and services PMIs for France and
Germany fell below the lowest forecast. For the euro zone, only the
service PMI didn't.
"There is a clear risk that the composite PMI falls further as
concerns about the situation in Greece and a possible euro exit
intensify, raising the threat of a renewed economic slowdown in the
euro zone," said Jessica Hinds, European economist at Capital
Economics.
Other economists said the smaller euro zone economies that were hit
so hard by crisis are still likely to report improvement in the
months ahead.
"Country data so far available suggest that the periphery did
comparatively well, with a good probability that the PMIs there may
show resilience when they (are) published in early May," noted Marco
Valli, economist at Unicredit.
In Britain, whose economy has performed better than the euro zone
over the past several years, retail sales fell unexpectedly in
March, hit by the biggest slump in fuel sales in just under three
years, separate data showed on Thursday.
CHINA STIMULUS
In China, where the government has been engineering a rebalancing of
its economy away from relying too much on exporting manufactured
goods towards domestic spending, the flash PMI fell to a one-year
low of 49.2 from 49.6.
Economists polled by Reuters had expected it to remain steady.
[to top of second column] |
Nomura analysts said the data underscored their call for two more 50
basis point cuts in the reserve requirement ratio for Chinese banks
as well as three more 25 basis point interest rate cuts over the
remainder of the year.
The People's Bank of China slashed its requirement for the amount of
cash that banks must hold as reserves by a full percentage point on
Sunday.
Hopes of yet more stimulus have helped sparked a massive rally in
the local share market. The CSI300 index of the largest listed
companies in Shanghai and Shenzhen has risen over 30 percent so far
this year.
Japan's PMI also slid, to 49.7 from 50.3 in April, as new orders
continued to shrink and manufacturing production fell for the first
time since July 2014. The data showed an increase factory hiring,
however.
At next week's policy review, the Bank of Japan is expected to hold
off on expanding its already massive monetary stimulus but may lower
its inflation forecasts.
In the United States, the pace of expansion in manufacturing is
expected to have moderated slightly, but it still growing at a
faster pace than in Europe. Markit's flash U.S. manufacturing PMI is
expected to ease slightly to 55.5 from 55.7 in March.
(Additional reporting by Rahul Karunakar in BENGALURU, Stanley White
in TOKYO and Nathaniel Taplin in SHANGHAI; editing by John
Stonestreet)
[© 2015 Thomson Reuters. All rights
reserved.] Copyright 2015 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed. |
