Eurozone: All about sentiment indicators – Danske Bank

According to analysts from Danske Bank, the key report in the Eurozone next week will be the PMIs. They hope to seem stabilisation soon in the PMIs.  

Key Quotes:  

“In the euro area, next week is all about sentiment indicators. On Friday, the euro area March flash PMIs are due out. In February, the print showed a divergence between services and manufacturing, when manufacturing PMI fell to 49.3 from 50.5 while services rose to 52.8 from 51.2 in January. This divergence supports our two-sided story of rising domestic demand, which supports the service sector, while the global slowdown continues to weight on manufacturing. In March we expect some stabilisation in the manufacturing index, which we see arriving at 49.1, while we see services PMI continuing to rebound to 53.1.”

“Country data reveals that Germany is the main driver of the slowdown in euro area manufacturing, since German manufacturing PMI in February fell to 47.6 from 49.7. Hence, we will monitor these prints closely on Friday, as improving activity in Germany’s industry will be an important ingredient for the euro area growth rebound we still expect to take shape in Q2.”

“In Germany, Tuesday brings the March ZEW index, where we look for further signs of stabilisation in business expectations, in spite of the falling trend of the current situation.”

“We expect the EU27 to accept an extension of Brexit when they meet on Thursday-Friday.”