The May purchasing managers’ indices from France and Germany were released at 9:15 am and 9:30 am respectively. The data was expected to show slight improvement in manufacturing and deterioration in services.
Indeed, that was the case for the French data, with the manufacturing PMI in line with expectations and the services PMI falling more than expected. However, the German data was a different story: the manufacturing PMI disappointed and fell rather than improving, while the service sector PMI rose unexpectedly. In both countries, the manufacturing PMI stayed below the 50-points threshold, pointing to recession, while the services PMI stayed above the 50-points threshold, pointing to expansion.
France
- Manufacturing: 46.1 vs 46.0 exp. (previously 45.6)
- Services: 52.8 vs 54.2 expected (previously 54.6)
Germany
- Manufacturing: 42.9 vs 45.0 exp. (previously 44.5)
- Services: 57.8 vs 55.5 expected (previously 56.0)
The EUR and European stock indices The short-term reaction was higher on the French data, with the EURUSD pair falling below the 1.08 level. While stock indices later recovered from those losses, they faced another sell-off following the German data. Meanwhile, the EUR attempted a rebound after the German data and moved back towards the 1.08 level.
Source: xStation5 by XTB
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