US economy shows signs of slowing

Economic data on Monday continued to show signs of slowing for the US economy.

A preliminary reading from Markit showed that its US services sector PMI fell to 52.7 in February from 56.7 in January.

This pulled the composite PMI for this month down to 53.5 from 56.2 in January.

Adding to evidence that the US economy has slowed, the Chicago Federal Reserve reported on Monday that its national activity index fell to -0.39 in January from -0.03 in December. The three-month moving average fell to +0.10 from +0.26.

However, the Chicago Fed noted that the three-month reading suggests that growth remained “above its historical trend” and that inflationary pressure is “limited”.

Elsewhere in the world, inflationary pressure in the euro area has also been limited. A report from Eurostat on Monday showed that consumer prices in the region rose at an annual rate of 0.8 percent in January, the same rate as in December.

Meanwhile, the outlook for the euro area's largest economy, Germany, remains positive. The Ifo institute reported on Monday that its business climate index rose to 111.3 in February from 110.6 in January, the fourth monthly gain and the strongest reading since July 2011.