Euro area PMI takeaways

<p>I'll try to keep things short and simple with this one, as we saw the euro do a bit of a down and up move after some contrast in the French and German PMI readings:</p><ol><li>The Eurozone economy continues to stay in contraction territory at the end of Q3. This points to rather sluggish growth with stagnation in France and a negative growth in Germany in all likelihood for the third quarter. The good news is that at least things aren't much worse than in August, besides the poor standout performance by France.</li><li>Demand conditions continue to be extremely weak, with not much improvements in sight. And that will continue to be a bane for the euro area economy in Q4 as well. The best-case scenario now is to avoid a much deeper contraction into the winter months and we'll have to see if employment conditions can keep holding up.</li><li>Inflation pressures are cooling off, which is added good news for the ECB. With the economy already facing a downturn, softer price pressures are definitely a welcome development for the central bank as they pause the tightening cycle. That being said, it might still take time to feed through to consumer prices and a bump up in energy prices is also worth keeping an eye out for in the months ahead.</li></ol>

This article was written by Justin Low at www.forexlive.com.