EUR/USD flows: EUR sees only a brief dip on IFO

EUR/USD seeing a modest dip on a weaker than expected IFO, although in reality the market consensus was probably lower than the surveyed consensus suggests after last week’s weaker than expected German PMI data. IFO continues to mirror the PMI quite closely, so today’s dip in the December data shouldn’t be much of a surprise., and the dip in the EUR has been quite short-lived. From a yield spread perspective, EUR/USD still looks a little stretched, but the EUR continues to benefit from solid equity market performance, and downside is likely to be limited while this remains the case. 1.10 nevertheless looks out of reach near term.