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ECB will lower rates further
ECB President Christine Lagarde hints at potential rate cuts as inflation risks ease, while global PMI data shows mixed signals of economic momentum across major economies.
Australia PMI slips to 49.9, showing contraction.
Eurozone PMI rises to 49.5, manufacturing still weak.
UK PMI steady at 50.5, services up, manufacturing down.
Japan PMI improves to 50.8, services lead growth.
In a speech today, European Central Bank (ECB) President Christine Lagarde outlined a significant shift in monetary policy. Moving away from the earlier guidance of maintaining restrictive interest rates “for as long as necessary,” she emphasized that the ECB’s current outlook on inflation and growth risks requires a more flexible approach.
With the “disinflation process well on track” and economic risks leaning more heavily toward weaker growth, Lagarde stressed the need for an “appropriate” policy stance. Importantly, she reiterated that further rate cuts are on the table if data aligns with the ECB’s expectations.
Australian PMI composite falls to 49.9
Australia’s latest Purchasing Managers’ Index (PMI) data for December highlighted a broad-based slowdown. The Composite PMI slipped from 50.2 to 49.9, indicating mild contraction.
- Manufacturing PMI fell to 48.2 from 49.4, marking deeper contraction.
- Services PMI edged down to 50.3 from 50.5, showing stagnation in the sector.
Eurozone PMI improves to 49.5
The Eurozone’s December PMI data showed mixed signals.
- Composite PMI rose modestly to 49.5 from 48.3, nearing expansion territory.
- Services PMI jumped to 51.4, signaling growth.
- Manufacturing PMI remained static at 45.2, staying in contraction.
Despite some improvement, overall economic momentum remains subdued.
UK PMI composite unchanged at 50.5
The UK’s PMI data for December painted a mixed picture of the economy.
- Manufacturing PMI fell to 47.3, an 11-month low.
- Services PMI improved to 51.4, returning to growth.
- Composite PMI held steady at 50.5, signaling overall stagnation.
Japan’s PMI composite rises to 50.8
Japan’s December PMI data indicated mild overall growth, driven by a robust services sector.
- Manufacturing PMI declined to 49.0, marking the fourth straight month of contraction.
- Services PMI improved to 51.4, lifting Composite PMI to 50.8 from 50.1.
This reflects a moderate recovery in Japan’s private sector, despite challenges in manufacturing.
