Mixed PMI’s spark uncertainty in the Eurozone

Eurozone services PMIs reflects continuous contraction; Asian markets respond to China's ambitious growth targets and Caixin PMI data

By Nadia Elbilassy | @Nadia Elbilassy | 5 March 2024

Market close
  • European PMIs: Mixed signals with Eurozone services PMI slightly surpassing expectations, while German services PMI remains stagnant and the UK's services PMI disappoints.

  • China's GDP Target: Unveiled during the National People's Congress, it's viewed as unrealistic, contributing to a 2.5% drop in the Hang Seng and heightened expectations for additional stimulus.

  • Oil Price Movement: Despite OPEC+ supply constraints, concerns about Chinese growth, and demand uncertainties, Brent remains above $80 at approximately $81.78.

On the Market Watch:

In Europe, a slew of PMI’s showed mixed indications about the Eurozone as the final services PMI up ticked to 50.2 vs 50.0 expected while the German final services PMI almost stayed the same from last month at 48.3.

The UK’s final services PMI also dropped to 53.8 vs 54.3 forecasted. The GBP was little changed after rising overnight, near 1.267. The euro was also muted near 1.0846.

Investors will be focused on the ECB press conference on Thursday for more cues on any cuts to come.

In China, The GDP target for 2024 was disclosed earlier today at the National People’s congress, where investors found unrealistic sending Asian stocks lower. The Hang Seng was 2.5% lower. Weighing on Asian stocks was China’s Caixin services PMI nudging lower to 52.5 vs 52.9 expected.

Another reason to anticipate more stimulus measures to achieve this growth percentage.

In Commodities, Oil prices continued to drop for the second consecutive day. Although the possibility of a more constrained market, driven by OPEC+ supply cuts, counteracted concerns about Chinese growth and demand worries, enough to keep Brent elevated above the $80 near $81.78.