- The German manufacturing PMI came in at 54.7 in May versus 54.0 expected.
- Germany’s services PMI fell sharply to 56.3 in May from 57.2 expected.
- EUR/USD is trading near highs around 1.0730 on mixed German PMIs.
Germany’s manufacturing sector accelerated its pace of expansion but activity in the services sector slowed in May, the preliminary manufacturing activity report from S&P Global/BME research showed on Tuesday.
the Manufacturing PMI in the economic powerhouse of the eurozone came in at 54.7 this month versus 54.0 expected and 54.6 previously. The index rebounded to two-month highs.
Meanwhile, the services PMI fell from 57.6 previously booked to 56.3 in May from an estimated 57.2. The PMI hit its lowest level in two months.
The S&P Global/BME Preliminary Germany Composite Output Index came in at 54.6 in May versus 54.0 expected and 54.3 in April. The gauge hit two-month highs.
Key comments from Phil Smith, Associate Director of Economics at S&P Global
“A post-lockdown recovery in services activity continues to provide a strong tailwind to the German economy, with May ‘flash’ PMI data signaling that output levels remain in growth territory.”
“Even manufacturing performed slightly better in terms of production levels in May. However, goods producers are increasingly turning to backlogs to support production as new orders show a sustained decline, which bodes ill for the sector’s growth prospects if demand for goods continues to falter.
Foreign exchange implications
EUR/USD holds ground higher near 1.0730, adding 0.35% on the day. The spot attracted a new wave of offers following hawkish comments from ECB chief Christine Lagarde.