Euro zone faces deepest downturn since early 2009
The euro zone economy is on course for its weakest quarter since the dark days of early 2009, according to business surveys that showed companies toiling against shrinking order books in November. Service sector firms like banks and hotels that comprise the bulk of the economy fared particularly badly this month, and laid off staff at a faster pace. The service sector PMI fell to 45.7 this month, its lowest reading since July 2009, the survey showed on Thursday, failing to meet the expectations of economists who thought it would hold at October’s 46.0.
Even for Germany, the business activity shrank for the seventh straight month in November, with the services sector contracting at its fastest rate in 3-1/2 years as the euro zone crisis pounds Markit’s composite Purchasing Managers’ Index, measuring activity in both manufacturing and services, edged up to 47.9 in November from 47.7 the previous month but remained below the 50 mark that separates growth from contraction, a flash estimate showed on Thursday.
“The picture emerging from November’s survey is that the German economy will end the year with a whimper rather than a bang as troubles in the euro zone continue to weigh on domestic business and consumer confidence,”
On the FX market, the GBPUSD settled higher, after the release of the minutes from the most recent policy meeting revealed that only Miles voted for QE and failed to indicate that more easing will be provided in December. In terms of technical levels, supports are seen at the 200DMA line at 1.5854, 1.5828 and then at 1.5792. On the other hand, resistance levels are seen at 1.5980 which is the 21DMA line and then at 1.6020.
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