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Andreas Wallström, Chief analyst at Nordea Markets, explains that the sentiment across euro area firms is on a downward trend as in September, the  manufacturing  PMI declined to 53.3, the lowest level in 2 years.

Key Quotes

“Looking at the Swedish PMI, which historically has been a good leading indicator for the euro-area,  further declines  should be expected. Also, the more leading sub-indices of new orders have been falling in both France and Germany in recent months. The sub-index for  new export orders  in the euro-area dropped below the 50-mark for the first time in five years.”

“Even though, the manufacturing sector is weakening  other parts of the economy is holding up better. The composite indicator, weighing together manufacturing and services sector, declined much less and remains on a high level.”

“The  ECB projects a stable and rather favourable economic development ahead.”