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    The German PMI puzzle

    Has someone put the reading for manufacturing in the services slot and vice versa? The German flash PMIs for June deliver very high surprises, but only when looking at the sectors. The composite figure is a bit below the consensus and slightly worse than the May outcome.

    However the manufacturing PMI beat market expectations and the previous reading by more than 2 pts and is the strongest since 1Q14. the Markit report says it is due to new orders from abroad, China and the US in particular. The comment also has a conclusion that there is no negative effect of Brexit fears seen in hiring and investment decisions of German businesses.

    On the other hand services PMI collapsed  by 2 pts, to 53.2 while the market was looking for 55 pts. Such a scale of surprises has never been seen before neither way and on any of the sector components. The Markit comment does not highlight the resaons for such a strong decline in services, which brings us back to the mid-2015 trough i nthe index.

     The numbers for the whole Eurozone are out in 5 min. 

    Any person acting on this information does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it.


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