ForexLive European FX news wrap: Euro, pound drop on PMI misses

<p>Headlines:</p><ul><li><a href="https://www.forexlive.com/news/france-september-flash-services-pmi-439-vs-460-expected-20230922/">France September flash services PMI 43.9 vs 46.0 expected</a></li><li><a href="https://www.forexlive.com/news/germany-september-flash-manufacturing-pmi-398-vs-395-expected-20230922/">Germany September flash manufacturing PMI 39.8 vs 39.5 expected</a></li><li><a href="https://www.forexlive.com/news/eurozone-september-flash-services-pmi-484-vs-477-expected-20230922/">Eurozone September flash services PMI 48.4 vs 47.7 expected</a></li><li><a href="https://www.forexlive.com/news/uk-september-flash-services-pmi-472-vs-492-expected-20230922/">UK September flash services PMI 47.2 vs 49.2 expected</a></li><li><a href="https://www.forexlive.com/news/euro-area-pmi-takeaways-20230922/">Euro area PMI takeaways</a></li><li><a href="https://www.forexlive.com/centralbank/boj-governor-ueda-will-not-hesitate-to-take-additional-easing-measures-if-necessary-20230922/">BOJ governor Ueda: Will not hesitate to take additional easing measures if necessary</a></li><li><a href="https://www.forexlive.com/centralbank/bojs-ueda-sustainability-of-wage-hikes-the-most-important-thing-for-inflation-outlook-20230922/">BOJ's Ueda: Sustainability of wage hikes the most important thing for inflation outlook</a></li><li><a href="https://www.forexlive.com/centralbank/bojs-ueda-could-consider-easy-policy-exit-when-achievement-of-2-inflation-is-in-sight-20230922/">BOJ's Ueda: Could consider easy policy exit when achievement of 2% inflation is in sight</a></li><li><a href="https://www.forexlive.com/news/the-bond-market-continues-to-hog-the-spotlight-20230922/">The bond market continues to hog the spotlight</a></li><li><a href="https://www.forexlive.com/news/uk-august-retail-sales-04-vs-05-mm-expected-20230922/">UK August retail sales +0.4% vs +0.5% m/m expected</a></li><li><a href="https://www.forexlive.com/news/uk-september-cbi-trends-total-orders-18-vs-18-expected-20230922/">UK September CBI trends total orders -18 vs -18 expected</a></li><li><a href="https://www.forexlive.com/news/spain-q2-final-gdp-05-vs-04-qq-prelim-20230922/">Spain Q2 final GDP +0.5% vs +0.4% q/q prelim</a></li></ul><p>Markets:</p><ul><li>NZD leads, JPY lags on the day</li><li>European equities lower; S&amp;P 500 futures up 0.2%</li><li>US 10-year yield flat at 4.482%</li><li>Gold up 0.3% to $1,925.47</li><li>WTI crude up 1.0% to $90.57</li><li>Bitcoin up 0.2% to $26,651</li></ul><p>It was a relatively lively session as the euro and pound came under the microscope amid the latest PMI data for September.</p><p>The French reading disappointed while the German reading reaffirmed a contraction in Europe's largest economy during the quarter, though the latter was better than expected on the month. That saw a bit of a fall and rise in the euro, with EUR/USD moving down from 1.0665 to 1.0615 before holding around 1.0640-50 currently.</p><p>The pound found little comfort from the poor PMI readings, with the BOE already having seen the numbers before choosing to pause yesterday. GBP/USD was already slightly softer on the day before extending a drop from 1.2260 to 1.2235 before keeping around 1.2250 levels now.</p><p>The dollar continues to keep in a solid spot, sitting more mixed on the day as it is only lower against the commodity currenies.</p><p>The yen was also a feature as BOJ governor Ueda ran back on his remarks on a "quiet exit" from two weekends ago, and that is seeing further pressure on the currency today. USD/JPY is up 0.5% to 148.25 as higher yields continue to keep the pressure on the yen as well.</p><p>In the bond market, the selling is hitting a bit of a pause after the poor PMI data today but nothing too significant. 10-year yields in the US dropped off to around 4.46% but are now back up to 4.48% and that continues to keep equities on edge. European stocks are lower today after the heavy selling in Wall Street yesterday but US futures are at least a little higher but still have to navigate through the US session later.</p><p>There will be US PMI also to watch out for and any surprises there could keep things rather interesting towards the end of the week. In that lieu, a downside miss will be of more impact than any upside beat I would say.</p>

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