Eurozone February final services PMI 55.5 vs 55.8 prelim

• Composite PMI 55.5 vs 55.8 prelim

Much like the other country readings, overall business activity picked up as the omicron impact fades but there are still lingering issues when it comes to inflation pressures. Those are the two key takeaways from the reports today. Overall output was the strongest since last September but output price inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term hits a new survey record high, so the latter will at least allude to inflation pressures persisting for a while longer. Markit notes that:

“The survey data for February depict a eurozone economy that was regaining robust growth momentum ahead of the invasion of Ukraine. Business activity accelerated to a pace commensurate with GDP growth in excess of 0.6%, buoyed by a relaxation of virus restrictions.

“COVID-19 containment measures, which had been stepped up to the highest for eight months across the region in January against the threat of the Omicron wave, were eased in February to the lowest since last November, driving a revival in spending on consumer-facing services in particular. Demand growth accelerated and hiring was stepped up as firms reported brighter prospects.

“However, business activity continued to be constrained both by supply chain bottlenecks and labour shortages, meaning a sellers’ market persisted for many goods and services. Prices rose to the greatest extent yet recorded in almost a quarter of a century of data collection.

“Although some of these constraints will ease as the Omicron wave ebbs, energy and other commodity prices, notably agricultural goods, are spiking higher again due to the conflict in Ukraine, meaning the risks are heavily tilted towards inflation running even higher and persisting for longer than previously expected, squeezing household budgets.

“Though it remains early days to be assessing the impact of the war, growth prospects are also likely to have been hit by heightened risk aversion and new sanctions, dampening the rebound from the pandemic.

“With inflation risks rising and growth prospects waning, the Ukraine conflict adds to business and household headwinds for the coming months, and exacerbates the difficult juggling act of the ECB in controlling inflation while sustaining a robust economic recovery.”