EUR flows: IFO slightly soft, but little EUR impact

The IFO survey has come in a little weaker than the published consensus, but market expectations may have been affected by the weaker than expected PMI data last week. In any case, we have seen a slightly positive response from EUR/USD, which has extended the gains seen in late Asia, climbing to 1.0715. But EUR/USD continues to move very much in line with 2 year yield spreads, so at this stage no major change looks likely, with 1.07 attracting.