News

• Prior -0.1%
• Retail sales Y/Y +0.5% vs +0.5% prior

This is not a market-moving release.

This article was written by Giuseppe Dellamotta at investinglive.com.

• Prior 51.3
• Composite PMI 52.5 vs 52.2 prelim
• Prior 51.2

This article was written by Justin Low at investinglive.com.

Eurozone HCOB Services PMI registered at 53 above expectations (52.6) in October

Eurozone HCOB Composite PMI increased to 52.5 in October from previous 52.2

European Natural Gas prices rose again as colder weather and lower wind generation boosted demand expectations, even as storage levels remain below average and speculative interest stays muted, ING’s commodity experts Ewa Manthey and Warren Patterson note.

• Prior 51.5
• Final Composite PMI 53.9 vs 53.8 prelim
• Prior 52.0

Key findings:

• Employment increases for first time in three months

Comment:

Commenting on the PMI data, Nils Müller, Junior Economist at Hamburg Commercial Bank, said:

“Germany’s services sector started the fourth quarter with renewed momentum, as the HCOB Services PMI surged to 54.6
in October, marking its highest reading in nearly two-and-a-half years. The acceleration in business activity was
accompanied by a solid rise in new work, which recorded only its second increase in over a year.

“Employment rebounded after two months of decline, with service providers returning to hiring mode amid rising backlogs of
work – the first such increase in 18 months. The accumulation of outstanding business, albeit modest, signals growing
capacity pressures, which surveyed firms attributed to stronger demand, supply shortages, and a lack of qualified staff.
However, optimism about future activity ticked down slightly from September’s recent high, suggesting some caution
remains despite the overall upbeat tone.

“Inflationary pressures intensified, with input costs rising at the fastest pace since April, which was largely driven by wage
increases, as firms reported. Output prices followed suit, climbing at the quickest rate in eight months. These developments
point to a sector regaining pricing strength amid improving demand conditions.

“Taken together, the October PMI data suggest that Germany’s services economy is regaining its footing after a subdued
period. The combination of rising demand, renewed hiring, and stronger pricing power bodes well for the broader economy,
even as firms remain watchful of external risks and cost pressures.”

This article was written by Giuseppe Dellamotta at investinglive.com.

• Prior 48.5
• Composite PMI 47.7 vs 46.8 prelim
• Prior 48.1

Despite the positive revision, it still marks a renewed downturn in France’s services sector with activity levels falling at its quickest pace since April. Some good news at least is that jobs growth held up while input price inflation saw its slowest increase in over four-and-a-half years. Meanwhile, business expectations for the year ahead also remained positive overall. HCOB notes that:

“The downward trend in France’s private sector economy continues unabated at the start of the fourth quarter. After the
HCOB manufacturing PMI already signalled weakness in October, conditions in the service sector also deteriorated. As a
result, the HCOB Composite PMI Business Activity Index has declined once again, marking the fourteenth consecutive
month in which the French private economy has failed to register growth.

“The French service sector is under pressure, with weak demand emerging as the central issue. This is reflected in declining
business activity and a disappointing level of new orders. Key drivers include customer caution and restraint, intense
competitive pressures and ongoing political uncertainty. Business expectations for the coming 12 months have further
deteriorated in October and remain well below the historical average. Several companies with a pessimistic outlook explicitly
cited the political situation as a contributing factor.

“On a more positive note, hiring activity in the service sector has so far remained resilient. The corresponding index has
stayed in expansion territory for three consecutive months, suggesting that the sluggish overall performance has yet to deter
hiring. However, caution is warranted: if demand remains subdued, employment dynamics are likely to weaken over time.
Declining backlogs of work serve as an additional warning sign, indicating that current hiring intentions may be built on shaky
ground.”

This article was written by Justin Low at investinglive.com.