Synopsis:

'Morgan Stanley forecasts a slight weakening in the euro area PMIs and a modest recovery in the UK, though both economies will likely remain on fragile footing. The Eurozone composite PMI is expected to edge closer to stagnation, while the UK remains in contractionary territory.

Key Points:

• Euro Area:

  • May manufacturing PMIs likely to slip slightly.

  • Composite PMI expected at 50.2, down from 50.4—just above the expansion threshold.

• United Kingdom:

  • Modest PMI rebound expected.

  • Composite PMI forecast at 49.5, still below the 50 mark, indicating continued contraction.

Conclusion:

Both PMIs reflect sluggish underlying economic momentum. The Eurozone clings to flat growth, while the UK struggles to emerge from contraction. Markets may view the UK data slightly more positively if upward momentum is confirmed, but overall risks to growth persist in both regions.