EUR flows: Bounce as German PMI improves, but upside limited

The German PMI data was somewhat better than the French, with recoveries in both manufacturing and services PMI, so that the Eurozone PMI as a whole was broadly in line with expectations. However, the price data is showing further weakness, and this could support the calls for a 50bp cut in December. But for the moment, the better German numbers are dominating, offsetting the talk of significantly weaker than  expected growth, and EUR/USD has bounced above 1.08. Even so, EUR front end yields are lower this morning, so there doesn’t look to be any significant upside for the EUR in the short term.