· The European economy records a fourth consecutive month of contraction in February.
· G7 leaders put spotlight on vaccine campaigns and a global economic recovery.
· Biden administration confirms its willingness to negotiate a nuclear deal with Iran, previously dropped by Trump.
· Economic indicators: PMIs in the US are expected to be published (Manuf. 58.5 e.; Serv. 57.6 e.).
PMIs for the European economy confirm a fourth consecutive month of contraction in activity during February. The Composite PMI set at 48.1, slightly above what was recorded in January (47.8), although the figure is still in contractionary territory. The surprise was seen in the services sector, which was expected to improve slightly, but deepened its contraction in February and reached their fastest pace of contraction since November (44.7). Manufacturing activities, for their part, remain as the economy`s best performing sector as they reached their highest level of expansion in 4 months (57.7). Optimism among surveyed businesses increased and a more robust recovery is expected to come to fruition in the second half of the year – once vaccine program in the region kick in and back a recovery in the services sector. Important rises in the prices of inputs were recorded in the industrial sector given some disruptions in supply because of the pandemic. Weak demand in the services sector still keeps inflationary pressures moderate, even though inflation could accelerate once this normalizes. Overall, the data confirms that quarantine measures in the continent continued to affect economic activities in February and suggest a new contraction in Europe`s GDP will be seen in the 1Q21, which will take the region through a second recession.