USD flows: USD up after stronger PMI
USD gains across the board on stronger PMI, but gains look a little stretched, particularly versus the JPY
A bounce in the US composite PMI index, driven by a sharp recovery in services, has taken the USD higher in early US trading, with US front end yields up around 7bps on the data. However, the stronger services index is offset by a reversal of the recent strength in the manufacturing index. The US numbers are similar to the UK numbers earlier, while the Eurozone numbers are showing manufacturing strength and services weakness. GBP is also generally firmer. But we wouldn’t put too much weight on these numbers as robust indicators, especially since they have been choppy in recent months. The gains in USD/JPY in particular look stretched above 150.
