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Eurozone PMI Reflects Weaker Output Outside Of Germany/France

DATA REACT

As anticipated esp after the weak France PMI reading, the Eurozone aggregate comes in weaker than had been expected coming into the session (Mfg 51.7 vs 52.7 exp; Svcs 50.1 vs 54.5 exp), indicating a loss of momentum in the bloc's economy midway through the third quarter of 2020.

  • Of note in the IHS Markit release is that "while the two largest eurozone economies remained in growth territory, outside the 'big-2' output decreased in August. That said, the contraction was only marginal."
  • On inflation: "The rate of [input] inflation was the sharpest since before the COVID-19 crisis hit, but remained relatively muted...Companies continued to lower their own selling prices, extending the current sequence of decline to six months"
  • On new orders: slowed midway through the third quarter, with growth of total new business undermined by a fall in new export orders (including intra-eurozone trade).
  • On employment: "decreased for the sixth successive month, although the rate of job cuts softened further from April's survey record."

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