Euro area PMIs seem to have dropped slightly in December

The euro area PMIs are looking a little too high, indicating towards 0.6 percent quarter-on-quarter GDP growth in the fourth quarter. There is certain moderation expected towards the end of 2016. The final November services figures were definitely revised downward, and hot on the heels of that the flash December PMI will be released, noted Societe Generale in a research report.

The figures are expected to wane slightly more with the services component in both Germany and France dropping by a few ticks. However, our forecast of a composite value of 53.6 for the euro area as a whole might still be in line with GDP growth of about 0.5 percent quarter-on-quarter in the fourth quarter.

“Our forecast stands at 0.35 percent qoq, but risks seem tilted to the upside”, added Societe Generale.