Release Explanation: Measures the activity level of Purchase Managers, they are surveyed on production, employment, inventories, orders, delivery data. The PMI is split into reads on Manufacturing, Service, and Construction industries. A read over 50 denotes growth. As an indicator of economic performance, the PMI has the ability to easily affect currency valuations as Institutions re-align existing positions, or build new, on the strength of these reports.

Trade Desk Thoughts: The service side of the economy in the Euro-area has been in contraction for the last nine months according to the latest PMI release. The released number of 39.2 is a multi-year low, as the economy is struggling to show any signs of growth amid the global slowdown. The PMI shows the service side of the economy is shedding jobs at a fast pace, while prices fall at a record speed. The release puts pressure on the ECB to cut the interest rate tomorrow as both the service and manufacturing sectors are contracting at a fast pace.

Forex Technical Reaction: The Euro fell 80-pips in the Asian session, but recovered most of the declines during the European session.