Commerzbank expects the Eurozone composite PMI to rise to 51.5 in February, helped by stronger manufacturing sentiment. It is keeping its 0.9% growth forecast for 2026.
The bank expects the industrial PMI to rise to 50 in February. It links this to easier policy, higher German government spending, a small increase in household spending, and a smaller-than-expected hit from US tariffs.
Eurozone Growth Outlook
It expects the ECB to keep key interest rates unchanged for the rest of the year. It also says a rate cut is more likely than a rate rise, because core inflation is moving below 2%.
The article says it was created with an AI tool and reviewed by an editor.
With next week’s Eurozone PMI data due, we expect the composite index to rise to about 51.5. A move above 50 would point to a return to modest growth. The main driver is a better outlook for manufacturing.
This rise matters because GDP growth was mostly flat in the final quarter of 2025. Data from January 2026 showed an unexpected rebound in German factory orders. That supports the view that industrial sentiment is improving. It also follows worries in the second half of 2025 about the effects of US tariffs.
Market Strategy Implications
The European Central Bank is expected to keep key interest rates steady for the near future. That should help stabilize markets. With January core inflation at 1.8%, below target, the next move is more likely a rate cut than a hike. This setup may limit large Euro gains, which could make range-trading strategies more appealing.
For stocks, gentle growth and a steady central bank are generally supportive. Traders may look at call options on major European indices. Implied volatility is low, which can make these options cheaper. This would mark a shift from the more defensive stance seen through much of 2025.
With a predictable central bank and a slow, steady recovery, overall volatility may trend lower. That environment can favor selling options premium on the Euro or equity indices. These strategies rely on the idea that price swings will stay limited in the coming weeks.
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