France December flash services PMI 48.1 vs 49.1 expected

Previous 9.3 Manufacturing PMI 8.9 vs 8.2 expected Previous 8.3 Composite PMI 8.0 vs 8.9 expected Previous 8.7 Lack of forecasts for French economic contracts in December. I expect any reaction to the weaker numbers here to be bad news, but so far the euro reaction has been muted. However, stocks remain under pressure, with SandP 500 futures down 20 points or 0.5% today, which could affect dollars later. Looking at the details of the report, services and composite readings are both at 22-month lows as output continues to decline sharply. SandP Global notes that: “A second month of slowing business activity in the eurozone’s second largest economy increases the risk that the region is heading for recession. Across France, output fell at the fastest pace since February 2021. “The deepening recession in the service economy compared to the industrial sector, which has made much more progress, as the PMI survey shows the manufacturing economy contracted for a full second to 2022. Industrial production, however, fell to its weakest level in seven months in December, while business confidence in commodity producers even returned to positive territory. This should be seen as a positive and gives early signs that the worst may be behind us. „However, price risks remain abundant and the energy price outlook remains a major uncertainty for households and businesses. We are also seeing the impact of higher interest rates on the economy and some companies are citing this as a factor in the decline in business. „Based on the latest survey results, we are likely to see French GDP shrink in the fourth quarter, increasing the risk of a deepening technical recession in 2023.”

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