The NEVI Manufacturing PMI in the Netherlands dropped from 51.8 in November to 51.1 in December. Despite this decline, a PMI above 50 still shows that the manufacturing sector is growing, just at a slower pace.

Supply Chain Issues

This decline indicates challenges like supply chain problems and shifting demand that manufacturers face. The manufacturing sector is crucial for the Dutch economy, significantly driving exports and economic growth. Analysts are closely monitoring upcoming data to see if this trend continues and how it might affect economic plans. The drop in the Dutch Manufacturing PMI to 51.1 in December 2025 was an early warning. Since then, initial data revealed that economic growth in the Netherlands nearly halted in the fourth quarter of 2025, growing by only 0.1%. This confirms that the slowdown in manufacturing is impacting the overall economy. For traders focused on the AEX index, a more cautious approach is advisable. There is growing interest in buying put options to shield portfolios from a possible drop below the 850-point level, which it struggled to maintain late last year. Selling out-of-the-money call options could also be a good strategy to earn premiums in what might be a sideways market.

ECB Meeting

This situation places the European Central Bank in a tough spot as it approaches its meeting later this month. With Eurozone inflation rising to 2.8% last month, the ECB faces challenges in lowering rates to boost growth, creating uncertainty for the Euro. This suggests potential range-bound trading for the EUR/USD pair, likely between 1.07 and 1.09 for the near future. Given this economic backdrop, we can expect increased volatility for Dutch stocks focused on industry and exports. Previous slowdowns in 2023 resulted in sharp, unpredictable movements in these sectors. We can utilize options to navigate this expected volatility, especially since implied volatility on the AEX remains above its 12-month average. The key event to watch will be the release of the January 2026 PMI data in early February. A reading closer to 50 would strengthen bearish sentiment and could put pressure on the AEX. Until then, all attention is on the ECB’s statements for any changes in its firm stance on inflation. Create your live VT Markets account and start trading now.

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