Europe’s PMI reading shows why further easing might be necessary

Euro zone's PMI reported what was broadly expected by the market that regional economies are losing steam after rising from the ashes, riding on the optimism from European central Banks (ECB) record easing.

Regional review -

• Spanish economy lost steam quite rapidly as manufacturing PMI reading came at 51.7, 21 month low.
• Italian manufacturing PMI dropped to 52.7 in September, seven month low.
• Netherlands PMI came at 53, six month low.
• Germany, region's largest economy saw its PMI drop to 2 month low to 52.3.

However all is not gloomy,

• Austrian PMI rose to 52.5, 19 month high.
• Irish PMI started bouncing back again and reached 53.8, highest in two months.
• French PMI rose to 3 month high to 50.6.
• Greece's manufacturing sector still contracting but at much moderate pace than earlier. Manufacturing PMI rose to 3 month high.

European PMI continue to pose broad based strength, but when it is combined with other indicators along with sharp drop in inflation it is quite evident that Euro zone economies are likely to face further loss of momentum arising from rapid slowdown in emerging markets and sharp scale back in their imports.

Euro is currently trading at 1.115 against Dollar.