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Wednesday’s data releases are focused on Eurozone and US final services and composite PMIs for December and Italian flash inflation estimates.
Final service and composite PMIs to weaken in the Eurozone
France and Italy are looking to come in only slightly below summer highs, whilst Germany and Eurozone PMIs continue a strong downwards trend.
Italy (0845 GMT) The Italian services PMI is projected to dip almost two points to 54.0 from 55.9 in December, with the composite reading expected to dampen to 56.1 from November’s reading of 57.6.
France (0850 GMT) French PMIs are expected to remain in line with flash estimates with services at 57.1 and composite at 55.6. These are a slight reduction from November’s readings of 57.4 and 56.1 respectively.
Germany (0855 GMT) German PMIs are also expected to remain unchanged from the estimates, painting a much less optimistic picture at a forecasted 48.4 for services, implying a contraction. The composite PMI is projected to be 50.0. These readings constitute a substantial dip from November of over four points in services and over two points in the composite reading.
The German private sector is facing considerably low growth on the back of surging COVID-19 cases, with the service sector particularly hard hit by the reintroduction of restrictions.
Eurozone (0900 GMT) Eurozone service and composite PMIs are expected to be unchanged from estimates at 53.3 and 54.4 respectively for December, down from 55.9 and 55.4 in a continuation of the downwards trend following the July peak.
Italian CPI to rise, decelerate on the month (1000 GMT)
Analysts are forecasting harmonised headline inflation for the Italy to rise to 4.2% y/y for December in the flash reading, up from 3.9%y/y in November. Monthly HICP is expected to weaken to 0.4% m/m from 0.7% m/m in November. Energy prices remain the key source of upwards pressure here, however food and transport service costs have also risen substantially.
US service and composite PMIs (1445 GMT)
Final readings for US service and composite PMIs are set to dampening only slightly in December at 57.5 and 56.9 respectively (unchanged from flash estimates). These strong PMIs will be encouraging following the Fed's decision to speed the taper in December. Output growth is looking strong in the US as supply constraints lessen, whilst services are seeing steep increases in input and output prices.
Today we have no major policy maker appearances, however the FOMC minutes from the December meeting, likely with details of the accelerated asset tapering, are due in the afternoon.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.