• Euro takes a ride on the PMI seesaw
• ECB’s Holzmann: A 25 bps rate cut is probable in December
• ECB’s Holzmann says will cut rates if circumstances, inflation allow for it
• ECB’s Vasle says should keep cutting rates in „measured steps“
• France October flash services PMI 48.3 vs 49.9 expected
• Germany October flash manufacturing PMI 42.6 vs 40.8 expected
• Eurozone October flash services PMI 51.2 vs 51.5 expected
• UK October flash services PMI 51.8 vs 52.4 expected
• UK October CBI trends total orders -27 vs -28 expected
• German wages continuing to grow despite economic headwinds – Bundesbank

Markets:

• JPY leads, USD lags on the day
• European equities higher; S&P 500 futures up 0.5%
• US 10-year yields down 5 bps to 4.192%
• Gold up 0.7% to $2,735.56
• WTI crude up 1.0% to $71.49
• Bitcoin up 0.7% to $67,071

Bond yields are coming off the boil and that’s the main driver leading markets so far today.

USD/JPY is down 0.6% as such to 151.90, pushing lower in European morning trade from around 152.20 earlier. The greenback surrendered some of its gains from earlier in the week as well given the circumstances.

10-year Treasury yields are marked down by 5 bps to under 4.20% and that’s giving broader markets a bit of a breather.

The euro was in focus amid PMI data, which saw mixed fortunes for France and Germany. That resulted in a bit of a seesaw action with EUR/USD falling initially to 1.0771 before climbing back up to around 1.0790 levels now. Large option expiries at 1.0800 is helping to keep price action in check.

As yields are keeping lower, equities are also looking to seek some relief. Tech shares led gains early on after Tesla’s earnings beat overnight. But that eventually translated to broader bids in European morning trade with regional indices also nudging higher.

S&P 500 futures are up 0.5% as stocks look to bounce back later in Wall Street trading.

All in all, that is pinning the dollar down a little across the board as the gains cool off. GBP/USD is up 0.4% to 1.2975 and AUD/USD up 0.3% to 0.6650 as the greenback’s run pauses ahead of the jobless claims and US PMI data later.

This article was written by Justin Low at www.forexlive.com.