Let's get right into it.
A slow(er) start to the new year
Well, that is to be expected amid tighter restrictions and the spread of the omicron variant across the region. Spain was the hardest hit in that regard, with services activity being a drag across all the readings today. Germany saw a slight improvement and that perhaps is a beacon of hope that any slowdown will likely be short-lived.
Of note, business optimism remains solid with the overall Eurozone reading rising to its highest since last October. That indicates businesses are still holding a more favourable outlook despite present omicron worries.
Surging price pressures not yet abating
Across all reports, cost pressures continue to pose a problem with ongoing constraints seen on the employment front as well as raw material shortages. While the latter has seen some easing, it isn't quite going away just yet and that will still pose a problem in the months ahead surely.
Of note, inflationary pressures are returning back close to the record highs posted in November and that is a rather disconcerting issue for businesses (in turn, consumers) and in the macro backdrop, one for the ECB as well.
