Eurozone February flash services PMI 55.8 vs 51.7 expected

• Prior 51.1
• Manufacturing PMI 58.4 vs 58.7 expected
• Prior 58.7
• Composite PMI 55.8 vs 52.7 expected
• Prior 52.3

Much like the French and German readings earlier, this report is a solid one as services activity rebounds strongly and overall economic activity grows at its fastest pace in five months. Evidently, the omicron impact is short-lived and we are seeing business conditions start to bounce back. However, supply chain issues continue to be persistent and that is feeding into high cost pressures still - which remain a problem for the region. Markit notes that:

“The eurozone economy regained momentum in February as an easing of virus-fighting restrictions led to renewed demand for many consumer services, such as travel, tourism and recreation, and helped alleviate supply bottlenecks. Business optimism in the outlook has likewise improved as companies look to the further reopening of the economy, encouraging increased hiring.

“However, although easing, supply constraints remain widespread and continue to cause rising backlogs of work. As such, demand has again outstripped supply, handing pricing power to producers and service providers. At the same time, soaring energy costs and rising wages have added to inflationary pressures, resulting in the largest rise in selling prices yet recorded in a quarter of a century of survey data history.

“The strength of the rebound in business activity signalled by the PMI provides welcome evidence that the economy has so far shown encouraging resilience in the face of the Omicron wave, but the intensification of 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 pressures will add to speculation of an increasing hawkish stance at the ECB.”