Eurozone services growth still solid but losing steam

Economic dockets from Euro zone are painting mixed picture of the region, while growth is definitely way stronger than it was during crisis of 2011/12, even much better than pre-QE, the turmoil in emerging markets is probably creating headwinds for the region in terms of exports both services and goods.

Latest PMI report from Markit economics show,

• Euro zone services output and new orders still strong enough to promote further rise in employment in the sector, however rate of growth was weaker.
• EMU services business activity index came at 53.7 in September, compared to 54.4 in August.
• Ireland and Spain are still among the fastest growing in European Monetary Union (EMU) with PMI at 59.5 and 54.6 respectively. Growth rate has reached however 16 month low and 9 month low respectively for these two.
• Germany and Italy both experienced solid growth with PMI at 54.1 and 53.4 respectively, however growth rate has reached 2 month low and 6 month low.
• Most attractive news is France, for which both manufacturing and services PMI has started picking up pace. Services PMI for September came at 51.9, 3 month high.
• Employment in the sector rose for 11th consecutive month, however job gains weakest since January.
• Service sector cost inflation rose in September, suggesting improved pay packages.

Further economic releases from the region is likely to under close scrutiny going ahead both by market participants and by European Central Bank (ECB) policymakers as further weakness might lead to expansion of balance sheet.

Euro is currently trading at 1.127 against Dollar.