German Preliminary Manufacturing PMI rises to 66.6 in March vs. 60.8 expected, EUR/USD bounces

  • German Manufacturing PMI arrives at 66.6 in Mar vs. 60.8 expected.
  • Services PMI in Germany expands to 50.8 in Mar vs. 46.2 expected.
  • EUR/USD bounces towards 1.1830 on upbeat German PMIs.

The German manufacturing sector outperformed in March, the preliminary manufacturing activity report from IHS/Markit research showed this Wednesday.

The Manufacturing PMI in Eurozone’s economic powerhouse came in at 66.6 this month vs. 60.8 expected and 60.7 prior. The index hit a record high (since April 1996).

Meanwhile, Services PMI unexpectedly expanded to 50.8 in March as against the previous month’s reading of 45.7 and 46.2. anticipated. The index rebounded to a seven-month high.

The IHS Markit Flash Germany Composite Output Index jumped to 37-month highs of 56.8 in March vs. 51.6 expected and February’s 51.1.

Key comments from Phil Smith, Principal Economist at IHS Markit

“The ‘flash’ PMI pointed to a notable upturn in German business activity in March, with the data, therefore, hinting at the prospect of better-than-expected economic performance in the first quarter. The result owed to a combination of survey record growth in manufacturing output and better performance from services, where some firms benefitted from the slight easing of lockdown restrictions.”

“The sustained upturn in the factory sector has seen the manufacturing PMI reach unprecedented heights, with growth in global demand for German goods showing no signs of abating and businesses reporting that previously-delayed investments are now being realized.”

FX implications

EUR/USD jumped 10-pips in an immediate reaction to a big beat on the German Manufacturing and Services PMIs, extending the bounce from four-month lows of 1.1812.

The spot was last seen trading at 1.1831, still down 0.18% on the day.


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