Analysts at Nomura suggest that contrasting with the recent weakness in US growth is evidence of improvement in euro-area data (finally) as its PMI data, especially on the services side, has shown a pick-up from previous months.
Key Quotes
“With headline CPI, out this Friday, likely to remain on the high side, the market may have swung too far from extreme optimism on the euro area to extreme pessimism. This should support the euro.”
“Meanwhile, many previously battered emerging market currencies such as the Mexican peso, Russian ruble and Turkish lira have bounced back, partly on lower US yields (on weaker US data), higher oil prices and event risks passing.”
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