The euro received a lift from better than expected PMI Manufacturing and Services surveys both of which printed materially stronger than forecast. The Manufacturing PMI rose to 36.7 from 34.7 eyed while the Services survey jumped to 43.1 from 42.1 projected. As we noted earlier, “Today’ s upward surprise should take some pressure off the ECB in the near term. European monetary authorities have come under enormous amount of criticism for keeping credit conditions too tight at a time when the rest of the G4 has implemented a near Zero Interest Rate Policy. The uptick in the PMI data suggests that the EZ economy is responding to a pick-up in global demand despite relative lack of fiscal and monetary stimulus.”

UK PMI Services report improved markedly rising to 45.6 versus 43.2 the period prior and 43.6 consensus call. The upside surprise in the PMI Services report caps a good week for UK economic data with PMI Manufacturing and PMI Construction releases improving as well. The news provides the strongest evidence to date that the contraction in UK economic activity may have finally leveled off, although all three gauges remain below the key 50 boom/bust line.

Eurozone flash PMI reading improved slightly in January with almost all of the gains coming from France while German data simply held its own. French PMI Services report increased to 42.9 from 40.6 the month prior while the Manufacturing data jumped to 38.1 against 34.9 in last period's reading. On the German side the data remained steady with Manufacturing at 32 against 32 expected while Services printed at 45.4 versus 45.5 forecast