Average all the PMIs from around the globe and you come up with a reading of 52.1, says JP Morgan. That should set up a risk-on environment, no? Not today, for some reason.
A dovish slant from the ECB, a downgrade of big European bank/insurer ING, Portugal’s negative credit outlook at Fitch, talk of another Benelux bank in need of a cash injection…all these have helped undermine market confidence in the Euro today.
The fact that EUR/USD could not rally on upbeat comments from Chinese central banker Fan Gang was a catalyst for longs to cut positions, as was the failure to bounce on another upbeat ISM report.
Everyone is focused on payrolls tomorrow, but once again I get the feeling that even if you gave me the number in advance the market would perform in mysterious (and unprofitable) ways.
EUR/USD is stabilizing in the lower end of the overnight range, now at 1.4265. 1.4170/90 is solid support if a deeper pullback unfolds.
