Nick Nasad
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Macro Data: Euro-zone Flash PMI Shows Steady Improvement

While manufacturing stumbled in China, leading to risk aversion in global markets, the news was much more positive out of the Euro-zone, where the flash reading of its manufacturing and services PMI's came in better than expected.

Here's a chart of the composite PMI (which is a combination of both manufacturing nad services) overlayed with GDP. What we can see is a continuation of the growth that the region has experienced since exiting recession. The Euro responded by rallying against most major rivals.

It's interesting to see the differences in recovery between Germany, France and the periphery.

In the chart above we see that countries outside Germany and France are actually recovering quite well, and Germany continues to push the pace. However, the problem in the Euro-zone at the moment is France, which has lagged behind and its PMI indicies - both in manufacturing and services - remain below the 50 level. Still, both came in slightly better than expected and the pace of contraction slowed compared to December.

Could this be a bit of a turning point? Perhaps. It's going to be slow and steady for the time being in Europe, and the key is that France picks up the slack.