From Morningstar:

Financial markets are waiting for “flash” estimates for purchasing managers’ indexes™ in the UK and Eurozone. This data is closely watched following the UK entering a recession and Germany joining it. These estimates are preliminary and subject to revision.

The HCOB Flash Eurozone PMI will be released on Thursday, signaling a possible recession for the Eurozone. Initial estimates are 48.4 for the composite index, 47 for the manufacturing PMI, and 48.9 for the services PMI.

The HCOB Eurozone Composite PMI Output Index rose to 47.9 in January, showcasing the softest rate of decline since last July. In January, economies in the south of the euro area, including Italy, experienced improvements while Germany and France saw contractions worsening.

Investors are seeing signs of improvement in the Eurozone. The surge in the PMI price indices led to the European Central Bank hesitating to cut interest rates. Inflationary dynamics in Europe are volatile and may require thoughtful monetary policy decisions.

Supply chain disruption in the Red Sea sector impacted Eurozone activities, but the overall impact is expected to be limited, and the latest data for Eurozone GDP suggests that the economy narrowly avoided a recession in the fourth quarter of 2023.

The UK is eagerly awaiting the “flash” PMI data set to be released on February 22nd. The data provides the latest insight into the health of the UK economy, similar to data for inflation, unemployment, wages, and GDP. The manufacturing and services PMI data represent the largest sections of the UK economy and offer an essential view.

While UK GDP data was weak, the PMI data set, especially for the services sector, will provide vital information for the Bank of England’s decision on interest rates, as the optimal decision for the bank is influenced by labor market and wage developments.



Read more: Flash PMIs: What to Expect from Eurozone and UK Data