Dawn breaks for Europe's beleaguered manufacturers
Eurozone manufacturing activity expanded in August, the first month-on-month increase in output since June 2022, according to the latest survey of purchasing managers compiled by S&P Global.
The HCOB Eurozone Manufacturing PMI increased from 49.8 in July to 50.7 in August. A reading above 50 indicates an expansion in activity versus the previous month.
Back in June 2022 Gazprom announced that it had cut the flow of gas to Germany by more than half, prompting a surge in European energy prices, and the onset of a brutal recession for the continents energy intensive industries.
The EUA futures price jumped on the data release (published Monday 1st September), and continues the bullish path set after the preliminary 'flash' PMI estimate was released on 21st August (the PMI survey data was collected during the previous 10 days).
The EU carbon price is now up over ā¬3 to around ā¬74 per tonne CO2 since the flash PMI data was first released. Notably, the price has broken out of the bearish trendline that has been in place since the beginning of the year, and which until now at least has served to cap any attempt to push the market higher.
The data may indicate the start of a period of renewed optimism for European industry, one that could see renewed appetite for EUAs from firms seeking to hedge their carbon risk exposure.
