(MENAFN– ecpulse) Euro area composite of manufacturing and services dropped last month to add more pressure on policymakers before the ECB rate decision tomorrow.
PMI composite retreated 53.5 from 54.0 in April, lower than analysts’ forecasts of 53.9.
Manufacturing sector’s growth narrowed to 52.2 from a previous of 53.4, while the services gauge rose to 53.2 from 53.1.
The data provide some hopes that recovery will hold its strength in the second quarter after growth stalled in the first quarter at 0.2 percent.
The main contribution came from the region’s biggest economy as the services sector widened expansion to 56.0 from 54.7 in April, whilst the manufacturing measure retreated to 52.3 from 54.1.
It seems that Germany will continue to give support to euro area’s growth as other nations struggle to remain on recovery trajectory.
French manufacturing unexpectedly dropped to 49.6 from a preceding of 51.2 and services returned to contraction after recording 49.1 from 50.4 in April.
Data released yesterday showed that euro area CPI estimate for the year ended May retreated further, adding more pressure on the ECB before this week’s monetary decision.
The advanced reading slipped to 0.5 percent from 0.7 percent, lower than forecasts of 0.6 percent.
The low inflation encountering the euro area meanwhile is the main threat to the recovery trajectory.
The ECB decided to hold its monetary stance this month but economists predict further addition to stimulus when policymakers announce their monetary decision on Thursday.
The central bank is ready to take action next month to combat any deflationary pressures, ECB President Mario Draghi said this month.
As of 08:10 GMT, the EURUSD traded lower around 1.3611 after touching a low of 1.3603 and a high of 1.3628.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.