French HCOB Composite PMI Flash (Feb) 49.9 vs. Exp. 49.7 (Prev. 49.1, Low. 49.1, High. 50.5)

• "The main drag continues to come from the demand side as new orders declined yet again, with the situation looking even worse for export orders."
• “At the sector level, developments diverged at the start of the year as manufacturing gained some ground while services contracted. February was no different, as factory production growth contrasted with falling services output."
• “Price dynamics continue to move in different directions across sectors. Service providers granted price reductions to their customers, whereas prices for manufactured goods picked up again after having fallen in the previous month. Corporate cost pressures increased only moderately, and inflation remains clearly below the survey’s long‑term average.”
• "Politically, agreement on the 2026 budget has brought some calm, but Macron's succession is already casting its shadow."

The French HCOB Composite PMI for February came in slightly above expectations, indicating a mild expansion in the economy despite underlying weaknesses, particularly in demand. The contrasting performance of manufacturing and services—where manufacturing improved while services weakened—hints at a mixed economic outlook, which could influence EUR sentiment. Additionally, sustained price pressures in manufacturing against reductions in services suggest divergence in inflation dynamics, with potential implications for monetary policy.