Investing.com – The euro area economy ended the first quarter on a low note as the two largest manufacturing sector in the region entered in March, according to survey data released Friday.
A preliminary reading for production activity in euro zone fell to its lowest level since 2013, and the worst is likely to continue to come, said investigator IHS Markit.
The news shook European stock and bond markets, pushing under $ 1.13 for the first time in 1[ads1]0 days. It fell 0.5% to the lowest in one week, while the return on the benchmark 10-year German government bond fell short below 0% for the first time since the fall of 2016. It was 0.00% at 05:30 ET (09:30 am). GMT)
"Forward-looking indicators such as business optimism and job feedback indicate that growth may be even weaker in the second quarter," IHS economics economist Chris Williamson said. "Worryingly, with order reserve expectations shrinking at the stiffest rate since the end of 2014, more and more companies are relinquishing on hiring, and likely considering their investment spending."
Markit said its flash PMI fell to 47.6 from 49.3 in January, the lowest since May 2013. Analysts had expected a reading of 49.5.
The one who measures the total output of both the manufacturing and service sectors fell to 51.3 this month, from 51.9 in February. It was supported by a stronger performance in which the index fell to 52.7 from 52.8 in February, in line with expectations.
An index reading above 50.0 indicates expansion, while one below it indicates contraction.
At the last political meeting on March 7, the European Central Bank pushed back its timeline to raise interest rates and announced a new round of low-cost financing to banks, known as TLTROs, and effectively admits that the downturn over the euro area economy will last longer than the first thought.
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