Eurozone October flash services PMI 48.2 vs 48.2 expected

• Prior 48.8
• Manufacturing PMI 46.6 vs 47.8 expected
• Prior 48.4
• Composite PMI 47.1 vs 47.5 expected
• Prior 48.1

The contraction in the euro area economy is seen deeper in October as both services and manufacturing sectors continue to see their respective downturns intensify to start Q4. The steepest contraction came from Germany while conditions in France stagnated, largely due to persistenly 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 broad-based economic uncertainty. S&P Global notes that:

“The eurozone economy looks set to contract in the fourth quarter given the steepening loss of output and deteriorating demand picture seen in October, adding to speculation that a recession is looking increasingly inevitable.

“While October’s headline flash PMI is consistent with GDP falling at a modest rate of around 0.2%, demand is falling sharply and companies are increasingly growing worried over high inventories and weaker than expected sales, especially as winter approaches. The risks are therefore tilted towards the downturn accelerating towards the year-end.

“While the rising cost of living remains the predominant cause of the economic slowdown, the region’s energy crisis remains a major concern and a drag on activity, especially in energy intensive sectors.

“Price pressures meanwhile remain stubbornly elevated, as rising energy and staff costs, and the weakened euro, offset any lowering of commodity prices linked to improving supply conditions. As such, the elevated survey price gauges will likely add the ECB’s resolve to tighten policy further in the coming months despite the growing recession risk. But there will likely also be some growing discomfort among some policymakers regarding the economic impact of tightening policy too aggressively in the face of other economic headwinds.”