Eurozone PMI Slumps to 50.5 as Services Drag Growth; ECB Cut Bets Rise

Eurozone PMI Flash Composite Index fell to 50.5 in March from 51.9 in February, the weakest pace of private-sector growth in over a year. The Eurozone PMI level is only slightly above the 50.0 stagnation line, raising Eurozone stagnation fears. S&P Global data shows services PMI business activity eased to 51.2 from 52.7. Manufacturing output stayed in contraction at 47.1, despite a small improvement versus recent readings. Sub-indicators point to slower new business growth, weaker business confidence (down to a four-month low), and cooling employment. The report cites high ECB interest rates, softer global demand hitting export orders, geopolitical uncertainty and supply-chain adjustments, and the gradual withdrawal of national fiscal support. Country-wise, Germany slid into contraction at 49.4, while France edged down to 50.6. The rest of the bloc looked marginally steadier, highlighting uneven growth within the monetary union. Markets reacted immediately: the euro weakened and European government bond yields eased as traders priced in a more aggressive easing cycle. Economists say the ECB will scrutinize the flash Eurozone PMI, strengthening expectations for rate cuts around June (or earlier) if inflation cooperates. Traders should watch the final PMI in early April to confirm whether this is a temporary dip or the start of a broader slowdown. The risk for crypto comes through tighter growth sentiment and possible shifts in global liquidity.