Manufacturing has been the strongest sector in Europe since last summer, as the restrictions have hurt other sectors, while manufacturing hasn’t been affected much since the first coronavirus lockdowns. It seems like there is a lot being produced right now, which is going to help keep the economy afloat when the new restrictions come as we head towards winter. The trend in the EUR/GBP has shifted to bullish, with the 50 SMA (yellow) acting as support on the H4 chart.

Latest data released by Markit – September 1, 2021

“Eurozone manufacturers reported another month of buoyant production in August, continuing the growth spurt into its fourteenth successive month. The overriding issue was again a lack of components, however, with suppliers either unable to produce enough parts or facing a lack of shipping capacity to meet logistics demand.

“These supply issues were the primary cause of a shortfall of manufacturing production relative to orders of a magnitude not previously recorded by the survey, surpassing the 24-year record deficit seen in July.

“Factory selling prices consequently rose steeply once again, albeit with some of the upward pressure alleviated by a slight cooling of input cost inflation, albeit with still-high materials prices adding to manufacturers’ problems.

“Employment growth meanwhile eased only modestly from July’s all-time high as producers remained focused on boosting operating capacity. However, a dip in future sentiment in August – linked to the peaking of demand, persistent supply chain issues and the spread of the Delta variant – add to signs that both output and employment growth has peaked.”