Overview
- Friday's flash PMI readings showed eurozone private-sector growth cooled to a four-month low with the composite index at 51.9 and France slipping back into contraction as firms cited political uncertainty and weak demand.
- The UK and India bucked the regional slowdown with the UK composite PMI at 53.1 and hiring returning, while HSBC's India composite index rose to 56.7 even as employment growth weakened.
- Germany remained in expansion but lost momentum as the composite PMI eased to 52.8 even though manufacturing stayed strong with a flash reading of 54.2.
- Survey respondents across countries reported a renewed pickup in input-cost inflation driven by higher energy, shipping and commodity prices, and many firms raised selling prices to protect margins.
- The mix of softer activity and stickier costs is complicating policy choices: markets expect the ECB to hold next week but see a chance of a December hike, the Bank of England looks likely to tighten in November, and the RBA faces stronger arguments for further rate action.