MNI US Open: Surprisingly Strong Eurozone PMIs

EXECUTIVE SUMMARY:

• EUROZONE PMIS SURPRISE TO THE UPSIDE IN MARCH
• U.K. INFLATION UNEXPECTEDLY FELL IN FEB
• MERKEL, STATE LEADERS TO DISCUSS LOCKDOWN MEASURES
• ASTRAZENECA MAY HOLD IN ITALY 29M DOSES FOR U.K. MKT: STAMPA
• SHIP STUCK IN SUEZ CANAL RISKS BLOCKING KEY TRADE ROUTE FOR DAYS

Fig. 1: Eurozone PMIs Surprise To The Upside

IHS Markit, MNI

NEWS:

FRANCE PMI: Highlights from the press release which seem largely positive. First stabilisation in new orders for 60months, new export orders fastest for 3 years, additional hiring of staff and outlook strong for year ahead.

• "The softer contraction in overall activity came amid a stabilisation in new orders during March. The result ended a six-month sequence in which demand conditions had deteriorated. Underlying data pointed to a sharp improvement at manufacturers which was offset by a further decrease among service providers. Some panellists commented that demand was building amid anticipation for the reopening of the economy, while others noted that ongoing restrictions continued to hinder sales."
• "Overall stabilisation in new work was supported by an improvement in international demand conditions during March. In fact, new export orders increased for the second month running and the fastest rate for just over three years."
• "Continuing the trend seen in the first two months of the year, French businesses took on additional staff at the end of the first quarter. Moreover, the rate of increase was the strongest for almost two-and-a-half years and solid overall. Sector data indicated that hiring was broad-based"
• "Finally, despite the degree of positivity easing slightly from February, confidence towards the one year business outlook remained strong. Anecdotal evidence indicated that firms expect an improvement in demand once COVID-19 restrictions are relaxed."

GERMAN PMI: Strong demand from China for manufactured exports, upbeat about the outlook but prices increased (with biggest rate of factory gate price inflation on record - since September 2002). Note most responses received before the lockdown was extended.

• Manufacturing "firms reported rising sales to Asia (particularly China), Europe and the US leading to record growth in goods export orders."
• "Manufacturers remained strongly upbeat about the year-ahead outlook for output. The degree of optimism was down slightly since February but still the third-highest on record (since July 2012). Service providers meanwhile raised their expectations for future activity, recording their highest level of confidence since March 2018."
• "Average prices charged for goods and services meanwhile rose to the greatest extent for two years in March. While services firms increased their output prices for the first time in three months, the main driver was a further acceleration in the rate of factory gate price inflation to a series record high (since September 2002)."

EUROZONE PMI: Most of the rest of the Eurozone grew in line with France (rather than Germany), according to the PMI press release. Other highlights:

• "Divergent trends were seen by sector. While manufacturing output growth accelerated sharply to the highest since data were first available in 1997"
• "The rate of contraction in the service sector nevertheless moderated to the slowest seen over this period, thanks to spill-over benefits from strong manufacturing growth, a modest easing of virus containment measures and encouraging prospects for the year ahead."

GERMANY (BBG): German Chancellor Angela Merkel to discuss lockdown measures with state leaders at a 11 a.m. meeting, DPA reports, without saying where it got the information. Meeting to focus on criticisms of recent lockdown decisions.

CHINA/TECH (BBG): China's government has proposed establishing a joint venture with local technology giants that would oversee the lucrative data they collect from hundreds of millions of consumers, according to people familiar with the matter. The preliminary plan, which is being led by the People's Bank of China, would mark a significant escalation in regulators' attempts to tighten their grip over the country's internet sector. It envisions the creation of a government-backed entity along with some of China's biggest e-commerce and payments platforms, the people said, asking not to be identified as the discussions are private.

GLOBAL (BBG): It may take days for salvage crew to move the giant container vessel that's clogging the Suez Canal out of the way, according to two people familiar with the situation. The vessel, Ever Given, is well and truly stuck in the embankment along the canal, according to two people familiar with the situation, who asked not to be identified discussing private details. The ship has been jammed length-ways across the canal early Tuesday in Egypt, leaving at least 100 vessels gridlocked.

ITALY/ASTRAZENECA/UK (BBG): A stock of 29 million doses of the AstraZeneca Plc vaccine is ready for export to the U.K. at an Italian plant, according to a report by Italian daily La Stampa. The doses at the Catalent Inc. vial filling plant in Anagni, near Rome, were found by Italian authorities after a report by the European Commission, the executive arm of the European Union, the paper said. At least some of them were allegedly produced by Astra sub-contractor Halix in the Netherlands, according to the paper, which can produce some 5 million doses per month.

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