The Weakness of European Economic Activity Decreases! Is This A Good Sign?


 Markets were presented with the latest data release from Europe which saw pressure begin to ease in the manufacturing and services sectors in December.

Europe's largest economy, Germany saw a better improvement this month, where manufacturing activity rose to 49.0 from 46.1 and services rose to 47.4 from 46.2.

Even so, both sectors still show contraction. This is because the number 50 separates the difference between expansion and contraction of an activity. If the reading above 50 indicates expansion, while below 50 the opposite.

Meanwhile, the service sector in France slightly decreased to 48.1 from 49.3, while manufacturing activity rose to 48.9 from 48.3.

According to S&P Global, although the weakness noted has eased slightly but the outlook for growth remains bleak due to declining demand, high inflation and central bank policy tightening.

Overall, the decline in the manufacturing and services sectors in the European Zone eased slightly although the readings recorded were still below contraction.

The impact on the currency, the euro traded little changed as investors are still assessing the data released.

Separately, the market was also seen with the release of PMI data from the UK showing mixed readings.

Britain's services data grew at 50 from 48.8, while manufacturing activity on the other hand contracted to 44.7 in December from 46.5 recorded in November.

The streak, the pound slipped lower against the US dollar after also being affected by the dismal UK retail sales data.