EUR, JPY, CHF flows: EUR holding up against the USD despite weak surveys

The French INSEE survey and the German IFO survey were both disappointing, with the INSEE survey particularly weak showing the weakest reading since 2013. This may relate to the recent political turmoil and the concerns about the fiscal position, but don’t really chime with the PMI data. The Eurozone money data, on the other hand, was on the strong side of expectations, with the 2.2% rise in M3 the largest since April 2023. However, loans to households remained weak at 0.3% y/y, so the European data retains a soft tone in general.

 Nevertheless, EUR/USD is holding up reasonably well in a generally risk negative market, standing little changed from opening levels, despite some fairly sharp declines in equities and yields. EUR/JPY remains under some pressure, as does EUR/CHF, but we don’t see a great deal more CHF upside here. The JPY continues to represent much the best value of the safe haven.