Eurozone March final services PMI 55.0 vs 55.6 prelim

• Prior 52.7
• Composite PMI 53.7 vs 54.1 prelim
• Prior 52.0

Both the headline and composite readings are at 10-month highs as the euro area economy caps off Q1 with three straight months of expansion. A pick up in demand conditions certainly helped while a softening of price pressures (output price inflation slowing to a 22-month low) is also a contributive factor. S&P Global notes that:

“The eurozone economy continues to bounce back from the lull we saw at the back-end of 2022 and the latest PMI survey will add fresh conviction to the view that, at least for now, the euro area is clear of a recession.

“March’s increase in economic activity mainly reflected strong growth across the service sector. Better momentum here is encouraging given the squeeze on household incomes from high inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term and rising borrowing costs. However, the picture is mixed at the country level, with a considerable upward push to growth coming from Spain and, to a lesser extent, Italy during March. It is difficult to envisage expansions of these magnitudes being sustained, meaning that a further strengthening of growth is dependent on other parts of the eurozone. Activity levels in Germany and France rose only modestly in March, painting a more conservative picture of underlying economic health in the eurozone.

“The case for further interest rate increases also remains strong based off the survey’s price gauges. Although inflation rates have cooled from their peaks, they continue to run in hot territory, particularly across the service sector.”