Thursday, 3 May 2012

Eurozone downturn deepens

There were some weak economic data on Wednesday, particularly from Europe.

The manufacturing downturn in the euro area deepened in April. Markit's eurozone manufacturing PMI dropped to 45.9 last month from 47.7 in March. The April reading was below the preliminary reading of 46.0 and was its lowest since June 2009.

Meanwhile, the eurozone unemployment rate rose to 10.9 percent in March, the highest since April 1997, from 10.8 percent in February.

US data on Wednesday were also uncharacteristically weak. Private employment increased by 119,000, the smallest gain in seven months, according to ADP Employer Services. Another report showed factory orders fell 1.5 percent in March.

In contrast, UK data on Wednesday took a turn for the better. Mortgage approvals climbed to 49,860 in March from 49,029 in February while the Markit/CIPS construction PMI eased to 55.8 in April from 56.7 in March but remained well above the 50 level.

Asian data on Wednesday also showed some economic resilience. HSBC's China manufacturing PMI improved to 49.3 in April from 48.3 in March while India's manufacturing PMI rose to 54.9 in April from 54.7 in March.

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