EUR, JPY flows: French and German PMIs mildly softer than consensus
While the French and German PMIs were both on the weak side of consensus forecasts, EUR/USD is not much changed and USD/JPY slightly higher, suggesitng they are not as bad as feared
Weaker services PMIs in France and Germany look to have been the main impact from the tariff crisis thus far – suggesting that the main impact is coming from confidence and market effects rather than the direct effects of the tariffs. Manufacturing PMIs in France and Germany are still weak and slightly lower on the month but a touch above consensus, while services and composite PMIs are below consensus. Still, the numbers aren’t disastrous – the German composite PMI is still above where it was in the whole of the second half of 2024. EUR/USD is not much changed, and USD/JPY is slightly higher suggesting the data is less weak than the market feared, even though it was below consensus forecasts. The US data this afternoon will, however, be potentially more significant.
