7 Apr 2015
Euro falls despite strong PMIs – BBH
FXStreet (Barcelona) - Previewing the Eurozone service PMI release, the Brown Brothers Team comments that EUR/USD fell despite the strong data and positive news from Greece, finding buyers around 1.0835.
Key Quotes
“The euro's slump comes despite the relatively constructive service PMI readings and further confirmation that Greece will make its IMF payment this week.”
“The eurozone service PMI rose to 54.2 from 53.7 in February and is the highest since last July. The flash reading was 54.3. France was the main source of disappointment, coming in at 52.4 vs. 52.8 of the flash and down from 53.4 in February. The French composite stands at 51.5, down from 52.2 in February.”
“Other than that, the other reports were mostly encouraging. Germany increased to 55.4 from 55.3 in the flash and 53.7 in February. Spain rose to 57.3 from 56.2. Italy surprised the most to the upside, rising to 51.6 from 50.0. It reported the largest employment gain since late 2010. In the region's composite, the ratio of new orders to inventories continued to improve to stand at its best level in nearly a year.”
“The employment indicator was the highest in four years. The PMI is consistent with growth around 0.4% in Q1. There is also some reason to think that price pressures are bottoming. The output price component rose each month in Q1though it remains below the 50 boom/bust level.”
“The euro found a bid near $1.0835, which is a retracement objective of the euro's rise from $1.0715 on March 31 to the $1.1035 high seen yesterday.”
“Chart support is seen near in $1.0790-$1.0800 area, and a break below would sour the tone, suggesting a retest of what we had thought was the bottom of the new range $1.07.”
Key Quotes
“The euro's slump comes despite the relatively constructive service PMI readings and further confirmation that Greece will make its IMF payment this week.”
“The eurozone service PMI rose to 54.2 from 53.7 in February and is the highest since last July. The flash reading was 54.3. France was the main source of disappointment, coming in at 52.4 vs. 52.8 of the flash and down from 53.4 in February. The French composite stands at 51.5, down from 52.2 in February.”
“Other than that, the other reports were mostly encouraging. Germany increased to 55.4 from 55.3 in the flash and 53.7 in February. Spain rose to 57.3 from 56.2. Italy surprised the most to the upside, rising to 51.6 from 50.0. It reported the largest employment gain since late 2010. In the region's composite, the ratio of new orders to inventories continued to improve to stand at its best level in nearly a year.”
“The employment indicator was the highest in four years. The PMI is consistent with growth around 0.4% in Q1. There is also some reason to think that price pressures are bottoming. The output price component rose each month in Q1though it remains below the 50 boom/bust level.”
“The euro found a bid near $1.0835, which is a retracement objective of the euro's rise from $1.0715 on March 31 to the $1.1035 high seen yesterday.”
“Chart support is seen near in $1.0790-$1.0800 area, and a break below would sour the tone, suggesting a retest of what we had thought was the bottom of the new range $1.07.”