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Eurozone October PMI Composite expected to slide to 51.8 - ING

FXStreet (Łódź) - Martin Van Vilet from ING suggests that the Eurozone October PMI numbers, due out on Thursday, will signal whether the growth slowdown in the area continued in the fourth quarter of the year.

Key quotes

"Last month, the composite PMI fell to a 10-month low of 52.0, while the manufacturing reading slipped to 50.3, barely above the 50 mark that separates contraction from expansion."

"The consensus expects the weakening trend to have continued in October and is braced for a drop in the composite index to 51.5."

"Timely indicators such as the German ZEW index and the Sentix sentiment indicator, both of which dropped sharply in October, certainly support this expectation."

"However, our favourite leading indicator of Eurozone activity, narrow money supply growth paints a slightly less concerning picture."

"As such, we have pencilled in a slightly smaller drop to 51.8 – to signal that we think the risks to the consensus expectation are skewed to the upside."

"That said, it is crystal clear that Eurozone growth is much too weak for anyone’s comfort."

"As such, pressure on policymakers to provide further stimulus to the economy will continue, even if the composite PMI unexpectedly regained some ground in October."

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