– Euro zone business activity stagnated in October as demand withered, according to a downbeat survey published on Thursday hours before European Central Bank President Mario Draghi makes his swansong appearance.
But inflation in the euro zone still languishes at less than half the ECB’s target and October’s preliminary Purchasing Managers’ Index readings add weight to fears the economic outlook is darkening once again. Germany’s export-dependent manufacturing sector remained in contraction this month, earlier data showed, suggesting a third-quarter slowdown in Europe’s largest economy could stretch into the closing months of the year.“The divergence between Germany and France persisted,” said Jessica Hinds at Capital Economics.
The ECB is all but certain to not make any policy changes, six weeks after unveiling a package including new asset purchases worth 20 billion euros a month, a rate cut and a pledge to open the money taps further if needed. Europe’s traders prepared for Draghi’s send off by pushing regional stocks to their highest in well over a year on Thursday and nudging the euro towards its best month since January 2018. [MKTS/GLOB]IHS Markit said the euro zone PMIs indicated economic growth of just under 0.1% this quarter, below the 0.2% predicted in a Reuters poll last week.
A PMI for the bloc’s dominant service industry nudged up to 51.8 from September’s 51.6, which had been its lowest reading since the start of this year. Economists had expected 51.9.
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