EUR flows: Little EUR reaction to expected 25bp ECB cut

No real surprises from the ECB with the 25bp cut in the deposit rate and 60bp cut in the marginal lending rate as advertised. Little in the way of forward guidance except to indicate that the direction of travel remains downwards by saying that policy is still restrictive. The market is still pricing around a 40% chance of a 25bp cut in October, but this looks a little on the optimistic side without further evidence of weakening growth and/or inflation, so the risks may now be biased slightly to the EUR upside, especially since yield spreads suggest the recent decline against the USD is a little overdone. There has been little immediate EUR reaction.