The Day at a Glance | January 24 2022

The Top

*Europe`s economy slowed down more than expected during January.

*United States tells families of diplomats in Ukraine to leave the country in light of risk of invasion by Russia.

*Economic indicators: January`s Timely PMI`s will be made public in the United States (Manuf. 56.7e.; Serv. 55e.).

Economic environment

Growth in Europe slows down. According to timely PMI`s for January, the European economy slowed down more than expected at the beginning of 2022. The Composite PMI fell to 52.4 (vs 52.6e.), its lowest level in almost a year; weakness was especially seen among the services sector due to the virus`s spread. Even though the services sector is expanding, its growing at its slowest pace in 9 months after a strong fall in demand for services as consumers isolate at home due to the risks of catching the virus. Demand indicators in the sector fell to their lowest levels since April. In contrast, manufacturing activities accelerated to their highest level in 5 months (59 vs 57.5e.), with signs that issues with the supply of inputs and production chains continue to ease. Meanwhile, production and employment continue to log solid increases during the month, a sign of a solid start in 2022. Within the European Union, data also showed mixed signals as there were surprising signs of strength in economic activity in Germany, but a strong than expected slowdown in France. The European economy is expected to recover growth at a faster pace in the following months – as the virus`s new wave passes, restrictions are removed and consumers once again increase demand for services.