Germany HCOB Composite PMI drops to 47.3 in November vs. 48.6 expected

• HCOB Composite PMI in Germany declined in November’s flash estimate.
• EUR/USD trades in daily range below 1.0500 after the data.

Business activity in Germany’s private sector contracted at an accelerating pace in early November, with the preliminary HCOB Composite Purchasing Managers Index (PMI) dropping to 47.3 from 48.6 in October. This reading came in below the market expectation of 48.6.

In the same period, the HCOB Manufacturing PMI edged slightly higher to 43.2 from 43, while the Services PMI declined to 49.4 from 51.6.

Commenting on the survey’s findings, “overall, business activity in Germany has decreased for the fifth month in a row. The political uncertainty, which has increased since Donald Trump’s election as US president and the announcement of snap elections in Germany on February 23, isn’t helping,” said Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank. “However, the modest increase in the future output index might reflect some hope that the next German government will manage to turn the economy around with bold measures, for example by reforming the debt break.”

Market reaction

EUR/USD showed no immediate reaction to this report and was last seen trading virtually unchanged on the day at 1.0475.