The end of last week brought a release from Markit over the German private sector economy for October. According to latest data, the activity improved peaking to a 2-month high in the service niche which overshadows the drop in the manufacturing industry. Flash German Services PMI (Purchasing Managers’ Index) came in at 55.2, after a 54.1 figure in September, also reaching a 7-month high. In contrast, the Manufacturing PMI printed 51.6, down from September’s 52.3 and at a 5-month low. The new businesses (firms) number in the German private sector hit a 10-month successive rise, while selling prices have gone up 9-month in a row. The drop mentioned in the industry sector is not surprising, as latest export data show a sharp downfall in Germany’s exports.
According to Markit, the private sector activity across the Eurozone in the month of October went up mostly due to the major uptick of the service sector. The Markit Eurozone PMI went up from a 4-month low in September at 53.6 to 54.0 in October. Flash Services Activity PMI came at 54.2 from 53.7 in September, reaching a 2-month high, while the Flash Manufacturing PMI had not changed from September’s 52.0.
The American dollar is appreciating against its Canadian counterpart, pushing the USD/CAD back above the 1.3100 threshold. The pair has started the upward trend after the domestic consumer prices came out under their expected values for September, the CPI going down 0.2% mom (month on month) with a 1% rise yoy (year on year) versus a forecasted -0.1% mom and 1.1% yoy. The daily heights of the spot were around the 1.3130 area, whilst the lows around 1.3040.
If we look at the black gold evolution we can see that in the US prices have dropped under the psychological $45.00 mark per barrel. The major factor of this decay is the PBOC (People’s Bank of China) rate cut announcement not impressing in any way the commodity traders, which lead to the USD strengthening. There was a slight rally to the $45.68/barrel on hopes that the downgrade of the borrowing cost would have boosted the demand, however the rally settled down quickly and prices came back to $44.53/barrel.
Moreover, we can see that the USD advanced across the board influencing the commodity prices and making them costlier in non-USD terms. If we look at the USD index, we can see that it traded in the 97.00 area around the session close on Friday, 0.5% higher that on Thursday.
