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Figure Heloc 
Prior 47.9Key findings:Softer falls in output and total new orders
Outlook brightens as employment rises for first time in four months
Charge inflation returns as cost burdens rise at fastest rate in over three yearsComment:Commenting on the PMI data, Nils Müller, Junior Economist at Hamburg Commercial Bank, said:
“Italian manufacturing began 2026 still in contraction, yet January’s survey data offered tentative signs that the sector may
be edging toward firmer ground. The headline index rose slightly to 48.1 from 47.9, marking a second month below the 50
threshold but signalling a slower pace of decline. The softer falls in both output and new orders suggest that the intense
weakness seen late last year may be easing. Even so, demand remains fragile at home and abroad, with firms reporting
cancellations and difficult market conditions. Export orders, excluding brief upticks in May and November 2025, continued
their nearly three-year downtrend, though the latest fall was modest.
“One of the most striking developments in January was the further intensification of cost pressures. Input prices rose at the
fastest pace in more than three years, driven by broad-based increases across key raw materials including metals and
wood. This pick-up in cost inflation fed through to selling prices, which climbed for the second time in three months. For now,
charge inflation remains mild compared with input costs, but the shift back into price-raising territory points to the return of
margin pressures.
“In line with weaker order flows, firms scaled back their purchasing activity at a faster pace, contributing to slimmer input
inventories. At the same time, there were signs of stabilisation in supply chains, with delivery times shortening for the first
time since mid-2025. Employment provided a rare bright spot, rising for the first time in four months as firms hired mainly
permanent staff, reflecting firmer expectations for the year ahead. This improved mood was also evident in the broader
outlook, with business expectations strengthening markedly and reaching one of the highest levels in nearly four-and-a-half
years, supported by expectations of sectoral recovery, borrowing cost cuts and new product initiatives.”
This article was written by Giuseppe Dellamotta at investinglive.com.
💡 DMK Insight
The recent PMI data indicates a mixed bag for Italian manufacturing, and here’s why that matters right now: While output and new orders are softening, the uptick in employment is a positive sign, suggesting a potential stabilization in the sector. However, rising cost burdens, the fastest in over three years, could squeeze margins and impact pricing strategies. Traders should keep an eye on how these factors influence the EUR/USD pair, especially if inflation pressures lead to shifts in ECB policy. If the PMI continues to show weakness, it could trigger a bearish sentiment in the euro, especially if it breaks below key support levels. Conversely, a sustained increase in employment could provide a bullish narrative, but traders need to be cautious of the inflation backdrop that could counteract this positivity. Watch for the next PMI release and any comments from the ECB regarding inflation. A decisive move below 1.05 in EUR/USD could signal a deeper bearish trend, while a rebound could indicate a buying opportunity as the market digests these mixed signals.
📮 Takeaway
Monitor the EUR/USD closely; a break below 1.05 could signal bearish momentum amid rising inflation concerns.
