European Shares Edges Lower Despite Robust PMI Reports

European stock markets are heading south, after a largely positive session in Asia, where the Nikkei managed to close with a 0.93% gain as exporters benefited from a weaker Yen. The delay of the U.S. vote on Trump’s health care bill, however, kept uncertainty over the president’s ability to pass his growth boosting agenda alive and in Europe investors are holding back and watch developments in the U.S. Both FTSE 100 and the German DAX are down on the day, and Italian, French and Spanish markets are underperforming. The much stronger than expected round of preliminary PMI readings out of the Eurozone did nothing to prevent markets from heading south.

House Leader Ryan postponed his afternoon press conference on Thursday and did not reschedule it, while Senate Leader McConnell has reportedly suggested that the ACA repeal vote won’t take place until Monday. Trump has since said the deal is going to be “very close”, but “we have a chance.” The President went on to say that either there would be a vote Friday or he would leave Obamacare.

Eurozone PMI’s Were Stronger than Expected in March

Eurozone PMIs surge higher in March and both manufacturing and services readings came in much higher than anticipated. The former jumped to 56.2 from 55.4 and the latter to 56.5 from 55.5, leaving the composite at 56.7, up from 56.0 in the previous month. The separate manufacturing output PMI fell back slightly and stands a 2-months low, but this is overshadowed, but the overall improvements and Markit also reported that employment showed the largest monthly improvement since July 2007, as firms sought to boost capacity in line with the recent rise in demand.

German PMI readings also surprise on the upside. Like the French numbers, the German PMI readings came in much better than anticipated with the manufacturing number rising to 58.3 from 56.6 and the services reading jumping to 55.6 from 54.4. So, despite the weak national business confidence readings and despite disappointing orders and production numbers recently, the PMIs continue to race ahead, with the Eurozone numbers now clearly set to exceed expectations again.

The French March PMI readings were much better than expected. After the disappointing French business confidence numbers, Thursday, today’s PMI readings for France surprised on the upside, with the manufacturing reading rising to 53.4 from 52.2 and the services number jumping to 58.5 from 56.4. This left the composite at 57.6, up from 56.9 in the previous month.