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Preliminary Data: Eurozone Business Sector Drops

Eurozone’s service sector contracts; U.K.’s CPI lower than expected.

EurozoneThe Eurozone’s manufacturing sector expanded in December, according to preliminary data. The Manufacturing PMI stood at 55.5, higher than expectations of 53 and the previous month’s reading of 53.8.

The services sector contracted, albeit at a slower pace, with a reading of 47.3. This came in higher than the previous month’s 41.7 and also higher than forecasts of 41.9.

The PMI Composite signaled a contraction of the business sector in December with a reading of 49.8, according to preliminary data. The reading is higher than the previous month’s 45.3 and expectations of 45.8.

By 10:18 GMT, the euro gained 0.37 percent against the greenback, hitting the 1.2196 level.

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The United Kingdom’s Office for National Statistics reported that the Consumer Price Index for November was at 0.3 percent (year-on-year), lower than the previous month’s 0.7 percent and below expectations of 0.6 percent. In monthly terms, it contracted by 0.1 percent, still missing expectations of a 0.1 percent reading.

The Core Consumer Price Index rose by 1.1 percent in November (year-on-year), below expectations of 1.4 percent and the previous month’s 1.5 percent.

The Bank of England is set to announce its monetary policy decision soon. Analysts expect the BoE to leave the cash rate unchanged, though the media have reported that the bank is now considering setting a negative interest rate.

The British manufacturing sector expanded in December with a preliminary Manufacturing PMI reading of 57.3, higher than expectations of 55.9. On the other hand, the Service PMI signaled a contraction in the sector with a reading of 49.9 in December, lower than the forecasted 50.5.

By 9:36 GMT, the pound gained 0.33 percent against the US dollar, hitting the 1.3506 level.

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