The Service sector in both Italy and Spain fell from January's reading. However, in both France and Germany growth in the service picked up in February. Most notably in France, January's reading of 49.4 indicated a contracting service sector, however there was a big jump up to 53.4 so things are starting to move in the right direction for France.
Also Markit’s composite PMI for the Eurozone indicateds the fastest economic growth in seven months in February. The composite headline index increased to 53.7 in February from 52.7 in January. Some Economists believe this puts the Eurozone economy on course for 0.3% growth in the first quarter. According to the report ta weaker Euro currency is helping to boost exports as well as sharply reduced oil prices which is helping companies' margins and consumers purchasing power is a more favourable growth environment for businesses
Although most of the data was promising for Europe we did see the EUR weaken off in the morning as most of the data did miss economists’ forecasts. The EUR dropped to an 11-year low against USD.
Consumers also helped to boost the Eurozone economy in January. The volume of retail sales jumped 1.1% in January compared with December according to statistics office Eurostat. It was a much bigger increase than the 0.1% growth predicted by economists. The bumper month pushed the annual rate of growth in sales to 3.7%, again much stronger than the 1.9% forecast. Yesterday’s surprisingly strong number out of Germany had given an indication the eurozone figures would be good.
The Markit Services PMI for the UK disappointed yesterday. The headline index came in at 56.7 in February, down from 57.2 in January. However as anything above 50 signals growth, it is still a good reading. According to Markit, it puts the economy on course for solid growth of 0.6% in the first quarter, following 0.5% growth in the fourth quarter of 2014. The first estimate of first-quarter growth will be published by the Office for National Statistics on 28 April.
In the US the ADP jobs report has come in below expectations. Private sector employers created 212,000 jobs in February, lower than the 220,000 forecast. The figure for January was revised up however, to 250,000 jobs from 213,000 jobs.
In recent months ADP’s initial estimate has underestimated the increase in official payrolls. In months when the weather has been worse than normal, the ADP survey usually overestimates payrolls. This is because workers only make it onto the official payroll count if they were paid in the working week containing the 12th of the month, they are still recorded as employed by the ADP if they weren't paid.
GBP - 12:00 - Bank of England interest rate decision (Feb) expected to remain unchanged at 0.5%
EUR - 12:45 - ECB Interest rate decision (Feb) expected to stay the same at 0.05%
EUR - 13:30 - ECB monetary policy statement
USD - 13:30 - Initial Jobless Claims (Feb) expected to fall to 295k from 313k
USD - 13:30 - Continuing Jobless Claims (Feb) expected to fall to 2.4M from 2.41M
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