SPEU - Solid-Looking Eurozone PMI Headline Reading Masks Disappointing Production Growth

• A strong headline PMI reading masked just how tough business conditions are for manufacturers at the moment.
• A record rise in inventories meanwhile reflected increased efforts by manufacturers to build safety stocks, in turn driven by fears of ongoing shortages of inputs in coming months.
• As long as output continues to lag new orders, prices will have a tendency to rise. Only by watching the PMI sub-indices will these inflationary signals be observed.

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