MediumIV Macro Policy & Sovereign Debt23 September 2026, Wednesday · 11:00 TRT (UTC+3)

Euro area composite PMI rises to 53.1 in September, the fastest growth in about 42 months; probability of an ECB October hike rises to 48%

The HCOB flash euro area composite PMI rose from 52.0 in August to 53.1 on 23 September 2026, clearly beating expectations. Services rose to 53.0 while manufacturing held at 52.7; input and output prices rose at the fastest pace in 4 months. The market-implied probability of a 25 basis point ECB hike in October rose from about 45% to 48%.

Location: EURO AREA

According to FXStreet and investinglive, the composite index came in at 53.1, services at 53.0 (previous 51.6) and manufacturing at 52.7 (previous 52.7). The composite forecast is given as 51.5 by FXStreet and 51.7 by investinglive and Newsquawk; the sources conflict. According to investinglive, this is the third consecutive monthly expansion and the fastest growth pace in about 42 months. Chris Williamson of S&P Global said the data point to quarterly GDP growth of 0.4% and that an October hike is definitely on the table. Input cost inflation has been above average since the start of the year, but below its May peak.

According to Newsquawk, Germany's composite PMI came in at 53.8 (forecast 51.8) and services at 52.9 (forecast 50); in France the composite was 51.2 (forecast 48.7) and services 51.4 (forecast 48.4), and according to investinglive French activity rose for the first time in 10 months. In the UK the composite PMI of 51.7 fell short of the 52 forecast. The ECB's Gabriel Makhlouf said second-round effects were not yet visible. Despite the data, the euro fell 0.3% to about 1.1412 dollars as US PMIs came in stronger; the dollar index traded in a 100.54–101 range. The ECB's deposit rate stands at 2.50% after the latest 25 basis point hike.

Talay assessment

Bottom line

Accelerating growth despite the energy shock and the fastest price increases in 4 months strengthen the case for the ECB to continue tightening. But market odds stand at 48%, meaning the October decision remains data-dependent and hinges on the flash inflation release in early October. The most likely path is a further 25 basis point ECB hike in October.

Likely effects

Euro area bondsNegativeWeeks
Strong PMIs and rising hike expectations push up near-term yields, raising financing costs for highly indebted countries.
French economyPositive1–6 months
The first rise in French activity in 10 months lends some support to growth assumptions in the budget deficit debate.
Turkish exportsUncertain1–6 months
Germany's composite PMI rising to 53.8 signals stronger demand in Türkiye's largest export market; the fall in the euro/dollar rate, however, limits exporters' currency revenues.

Possibilities, ranked

1
25 basis point hike in October55%
September inflation comes in high and the ECB raises the deposit rate to 2.75%.
Watch: Euro area September flash inflation, due in early October
2
Hold in October, hike in December35%
The view that second-round effects are not visible prevails, and the ECB waits for its December projections.
Watch: Pre-October remarks by Makhlouf and other ECB members
3
Cycle pauses10%
Energy prices fall and growth weakens; the ECB stays at 2.50%.
Watch: The composite index approaching 50 in the October flash PMI

Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.

Market reaction

Indicators affected

EUR/USD▼ 1.1412
Composite PMI▲ 53.1
ECB October hike odds▲ 48%

Historical context