Economic sentiment indices in Europe continue to show mixed results, with the service sector offering some optimism. Across the Atlantic, the U.S. manufacturing PMI disappointed, but expectations for services are at their highest in years. Meanwhile, in Poland, core inflation is rising, making interest rate cuts unlikely in the near future.
PMI Indices in Europe
Yesterday, preliminary PMI indices for Europe were released. Notably, the services PMI performed significantly better than expected. The reading came in almost 2 points above forecasts, surpassing the key 50-point mark. This signals a majority of positive responses over negative ones. In contrast, the manufacturing PMI fell slightly short of expectations, recording 45.2 points for the eurozone, reflecting continued pessimism and limited growth prospects.
The two largest economies in the EU, Germany and France, are showing weaker results compared to the eurozone average. Political uncertainty in both countries may be influencing these figures, as upcoming elections could shift economic policies. Despite the mixed results, markets reacted neutrally, with the strong service sector data overshadowing the weaker manufacturing numbers.
Core Inflation in Poland
Core inflation data for Poland was also released yesterday. The core inflation rate rose to 4.3%, up from 4.1% the previous month, aligning with expectations. This remains below the general consumer price index, which currently stands at 4.7%. These figures continue to justify the lack of interest rate cuts in Poland.
However, a significant part of this inflationary pressure is attributed to the phasing out of anti-inflationary shields, which effectively spread out the rise in inflation over time.
Diverging Sectors in the U.S.
In the United States, there is an unusually large disparity between the PMI readings for the manufacturing and service sectors. The manufacturing PMI fell below expectations to 48.3 points, down from 49.7 points last month, when it was approaching the critical 50-point mark.
On the other hand, the services PMI delivered a positive surprise, reaching 58.5 points — the highest level in three years. This results in a 10-point gap between the manufacturing and services indices, a rare occurrence.
Additionally, the NY Empire State Manufacturing Index was released, showing a flat result near zero, despite optimistic forecasts following strong performance in November. The U.S. dollar remained stable, but its low volatility suggests that investors are poised for a significant move, possibly before the holiday season.
Maciej Przygórzewski – Chief Analyst at InternetowyKantor.pl
Source: ManagerPlus
