EUR flows: Weak French data limits EUR recovery

French February CPI and revised Q4 GDP have both come in weaker than expected at flat m/m and 0.6% y/y respectively, triggering general declines in EUR yields, which were already edging lower rafter US yields once again fell overnight.  German CPI data is still to come today, but the French downside miss was quite significant at 0.3% below consensus, so risks for Eurozone February CPI are now clearly on the downside. EUR/USD had already slipped below 1.04 overnight and had been recovering ahead of the French numbers, but these will argue against the break back up above 1.04 gaining any momentum. Even so, with US yields also lower our models don’t suggest much scope for movement away from 1.04 at this stage.