A short comment on Euro area PMI data - Increasing signs of ‘green shoots’ in Europe

Increasing signs of ‘green shoots’ in Europe

Euro area PMI data released this week brings further signs of life for the region, where final figures showed particularly robust gains in France.

Breaking down the Euro area Services PMI, which looks specifically at the economically-sensitive Services sector, the data showed a clear rebound in its forward-looking components. For instance, figures showing incoming new business to companies, staff employment numbers and general business activity were strong. PMIs are decent leading indicators for activity and growth, so this is particularly important to watch for investors in order togauge marketsentiment in the coming months.

It’s clear that the European recovery is gaining momentum, and this is happening just as the European Central Bank is preparing for its large-scale asset purchases. This combination should be supportive for European markets in the coming months, barring any major risks around Greece or Russia-Ukraine materialising.

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