German Manufacturing PMI rebounded in August to hit 59.3, the third highest reading since 2011.
A reading above 50 signifies expansion and a reading below 50 points to deterioration in the sector. 59.3 is a bumper reading from Germany, far outpacing Manufacturing PMI in China which came in at 51.4 and the Eurozone which saw a respectable reading of 57.4.
The latest instalment of manufacturing data will further fuel the argument the ECB’s stimulus program has done its job in supporting the economy and it will soon be time to start tapering bond purchases.
Mario Draghi has been in the spotlight recently as the market tries to gain an insight to his thinking the nature of the bond purchases wind-down. Draghi has been careful in his approach however as he has gained a reputation of talking markets up or down and any comments could cause unintended market moves countering his real intensions.
“While forward guidance is a useful instrument, recent research has highlighted that its effectiveness can be improved if combined with other non-standard monetary policies,” Draghi said last week at the Jackson Hole symposium
The ECB is due to meet next week but many analysts don’t see any confirmation of changes to bond purchases until October.
