German Producer Prices in March declined by -0.7% versus -0.3% projected, contracting for the sixth straight month n a row. Analysts are beginning to worry about the prospect of deflation spreading throughout the Eurozone as highlighted by yesterday’s article in New York Times - and today’s German PPI data does little to alleviate those concerns.

German and French PMI readings improved for the first time in months suggesting that that vicious contraction in demand that dogged the region over the past year may be showing nascent signs of stabilization. German Manufacturing PMI printed at 32.2 vs. 31.9 eyed while the Service PMI rose slightly to 41.7 from 41 forecast. The French data was better with services rebounding to 42.9 from 40.2 expected and manufacturing registering a reading of 36.3 versus 35 called. The EZ Composite PMI number also rose to 40.1 from 39.2 the period prior.

Trade data from both Germany and France printed worse than expected suggesting that Eurozone economic output figures will likely prove to be weaker than the current government estimates. German Trade Balance recorded a 8.3 Billion euro surplus less than the 10.0 Billion number that the market was expecting while French data showed a deficit of -4.5 Billion against forecasts of -3.0 Billion.