Eurozone PMI’s give further headaches to the ECB

May 2018 Eurozone Markit manufacturing and services flash PMIs 23 May 2018

Eurozone manufacturing PMI flash 55.5 vs 56.0 exp
Prior 56.2
Services 53.9 vs 54.6 exp. Prior 54.7
Composite 54.1 vs 55.0 exp. Prior 55.1

Well, Q2 ain’t getting much better is it? The market will have been leaning this way anyway given the French and German numbers but it confirms the softness. Both manufacturing and services are at respective 18 & 16 month lows. There’s some good nes for inflation with input costs up to a 3 month high but margins were squeezed as output prices rose the slowest since last Sep. The majority of price rises came from higher fuel and energy costs, which is not the sort of inflation the ECB is bothered about and it takes time for that to filter through.

Long and short, no good news for the ECB.