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Eurozone services PMI likely to confirm another month of deterioration
The rates of contractions in the 17-nation economy have clearly bottomed out in so many perspectives, while confidence has markedly improved in the past period. However, the euro zone downturn probably continued despite signs of stabilization in Germany.
Economists still believe, regardless of lousy economic situation in euro area, that PMI data might possibly underpin the recovery forecast at some point in coming months, where the economy is expected to pick up in the second half of this year.
The Manufacturing PMI for the euro zone was revised up to 47.9 from January’s 11-month high, signaling a downturn in business conditions for the nineteenth consecutive month. But the rate of contraction remained one of the weakest in almost a year.
Markit is set to offer more signs that the euro-zone contraction has paced out last month, with the Services PMI expected to be confirmed at a final 47.3, more than a notch below January’s 48.6, with the same readings seen in the Composite index as well.
These data sounds positive so far, reflecting the downturn is losing steam. Unfortunately, the PMIs clearly suggest that were not out of the woods yet! Or in other words, the recovery remains far away from the tips of the economy at the meantime!
By contrast, there’s hope at the end of day, while the downturn becomes less severe each month, backing the European Central Bank’s forecast of a euro-zone recovery later in the year, likely supported by a strong rebound in Germany, the bloc’s largest economy.
Germany’s final services PMI is expected to tap a 54.1 in February, near its strongest in almost two years. However, Spain services PMI is seen plunging to 45.8, well below January’s 47.0, signaling a stronger decline in activity and sharp reduction in employment.
Overall, the market will be receiving one hectic doze today with the release PMI data, if which was positive will surely support the fragile sentiment and likely lift the single currency from its lowest level in nearly three years against the U.S. dollar.