Eurozone HCOB Composite PMI improves to 47.9 in January vs. 48 expected

• HCOB Composite PMI for the Euro area improved slightly in early January.
• EUR/USD continues to fluctuate below 1.0900 after PMI data.

The economic activity in the Euro area’s private sector continued to contract in early January, albeit at a slower pace than in December. HCOB Composite PMI edged higher to 47.9 in January’s flash estimate from 47.6 in December. This reading, however, fell short of the market expectation of 48.0.

In the same period, HCOB Services PMI declined to 48.4 from 48.8, while the Manufacturing PMI improved to 46.6 from 44.4.

Commenting on the PMI survey’s findings, “the commencement of the year brings positive tidings for the Eurozone as manufacturing experiences a widespread easing of the downward trajectory witnessed in the past year,” said Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank. “This positive shift is evident across key indicators such as output, employment, and new orders. Notably, the export sector plays a pivotal role in driving the improvement of the latter, showing better conditions compared to the end of the preceding year.”

Market reaction

EUR/USD clings to modest daily gains above 1.0850 following this report.