China likely had limited impacts on Eurozone

The slowdown in economic growth in China and other emerging market economies seems to have had a relatively limited impact on the eurozone economy. 

Although downside risks to growth and inflation have increased, past rises in the euro have helped to cushion the impact of weaker external demand. 

Business surveys have generally exhibited resilience in recent months, although they continue to signal only a moderate pace of growth. The eurozone manufacturing PMI eased to 52.0 in September from 52.3 and the services PMI edged down to 53.7 from 54.4. 

But seen over the past few months, the economy seems to have held up surprisingly well. 

The latest 'hard' data have mostly been on the soft side, with German industrial production dropping 1.2% on the month and retail sales also declining. However, it is difficult to read too much into volatile monthly figures

"In contrast to the US and UK, ECB policy rates look set to remain on hold for some time to come. We maintain our expectation that short-dated German bund yields will stay anchored at low levels, with the 2-year yield staying in negative territory this year and likely for most, if not all, of 2016", notes Lloyds Bank.