Tuesday, 7 May 2013

Eurozone economic data show contraction, China services slow

Weak economic data continued to come out of the euro area on Monday.

Markit's services PMI for the euro area rose to 47.0 in April from 46.4 in March, helping to pull the composite index up to 46.9 from 46.5. That still left the composite index below 50, indicating contraction, for the 15th consecutive month.

Another report on Monday showed that retail sales in the euro area fell 0.1 percent in March after having fallen 0.2 percent in February.

With the eurozone economy still looking weak, European Central Bank President Mario Draghi reiterated his readiness to cut interest rates again on Monday, helping to push the euro down against the US dollar.

Meanwhile, China's economy has not been spared the global economic weakness. A report on Monday showed that the HSBC services PMI for China fell to 51.1 in April, the lowest since August 2011, from 54.3 in March.

However, things are looking up again in the US, with the positive Friday employment report being followed on Monday by a report from the Federal Reserve showing that banks eased lending standards to businesses over the last three months.

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