- France October flash services PMI 48.3 vs 49.9 expected
- Germany October flash manufacturing PMI 42.6 vs 40.8 expected
At the balance, not too much has changed. EUR/USD was holding around 1.0787 before the data and is now around 1.0792 currently. The stronger than expected showing in Germany is helping to offset downbeat numbers from France. However, both key economies in Europe are still showing a contraction to start Q4.
That reaffirms that the Eurozone economy is still leaning towards the softer side overall. But the good news is that it isn't worsening at a much rapid pace, at least for now.
If anything, the data will serve to reaffirm another rate cut in December but perhaps not quite the 50 bps that some traders might be hoping for.
That being said, traders are pricing in some ~122 bps of rate cuts still over the next five meetings for the ECB. And that pricing is not likely to shift whatsoever based on the data so far today.
Going back to EUR/USD, the pair is now bouncing back up after a dip to 1.0771 earlier. But with large option expiries seen layered through to 1.0800, it should limit any major upside pull in the session ahead. In terms of technicals, the 100-hour moving average at 1.0818 will be one to add a key layer of resistance in the near-term.
