Recap 9-20-12: EU Growth Worsening


The EU PMI figures today support two views that have been held here. First, recent ECB policy actions are unlikely to have a substantial enough effect to bring the peripheral region out of recession. And secondly, the divergence in growth between Germany and the rest of Europe would continue until labor costs become more equalized.


  • PMI:
  1. EU composite PMI fell to 45.9, the weakest level since mid 2009
  2. EU Mfg PMI improved to 46 vs 45.5 exp and 45.1. However, this was because sharp strength in Germany outweighed sharp weakness in France
  3. EU Services PMI declined to 46.0 vs 47.5 exp and 47.2 prev. Again, the German figure was a bit better than expected while the French figure tanked
  4. UK Markit flash PMI was unchanged at 51.5 in Sept as exp
  5. China HSBC Flash Mfg PMI improved to 47.8 in Sept vs 47.6 prev

Upcoming Data:

  • Fri: Canada CPI, Quadruple Witching
  • Mon: German IFO, Dallas Fed
  • Tues: Canada Retail Sales, Richmond Fed
  • Wed: German CPI, South Korea PMI
  • Thu: EU Money Supply, Industrial Confidence, US DGO, Jobless Claims, Japan PMI