The recent events in Ukraine and slowdown in some EM economies including China so far have not dented growth momentum in the Eurozone.

The 'flash' Eurozone composite PMI for March was little changed at 53.2. Both the manufacturing and services component showed minor falls.

Meanwhile, the country breakdown revealed that the Eurozone aggregate reading was boosted by a near four-point catching-up in the French composite PMI.

The German equivalent, by contrast, eased somewhat, albeit remaining at a high level (of 55.0), and the average reading for the other individual Eurozone countries also recorded a decline.
 
The fact that Eurozone growth momentum held up well in March is welcome and fairly surprising given the Ukraine-led turbulence in financial markets.

However, a sustainable recovery is not yet firmly established. Indeed, the further weakening in the Chinese PMI and the relatively strong euro do not bode well for export growth momentum going forward and with unemployment still elevated and fiscal policy still contractionary, a strong revival in domestic demand seems unlikely going forward.

That said, the further signs of recovery will encourage the ECB in refraining from further monetary easing, at least in the short term. 
 
Martin van Vliet, ING
 
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