Eurozone Business Activity Hits 7-Month High in March

The Flash Eurozone Composite PMI Output Index, a key indicator of both services and manufacturing business activity, rose to 50.4 in March from February's 50.2, marking the highest level in seven months. This preliminary data, released by S&P Global and Hamburg Commercial Bank (HCOB), signals a cautiously optimistic outlook for the region's economy.

Sector-Specific Trends Show Divergence

While the manufacturing sector reached a 26-month high with a PMI of 48.7, the services sector experienced a slight dip, with its PMI falling to 50.4, a 4-month low. This mixed performance underscores the uneven recovery across different sectors of the Eurozone economy.

ECB's Monetary Policy in Focus

"The price dynamics in the services sector, closely monitored by the ECB, may please the more dovish members of the monetary authority," noted HCOB Chief Economist Cyrus de la Rubia. He also highlighted the moderation in manufacturing price increases, aided by lower energy costs, but warned of looming risks such as potential US retaliation tariffs.