PMIs look shaky under the surface - Flash.....>

FOREX: PMIs look shaky under the surface

- Flash February PMI data across Germany, France and the UK generally fared very

well. But, a look below the headlines exposes key vulnerabilities which may be

limiting the EUR and GBP's recovery early Friday. While headline readings for

services and manufacturing were generally better-than-expected, much of the

uptick was due to suppliers' delivery times slowing markedly (usually a positive

as this suggests producers are nearing capacity), but this was largely  due to

Coronavirus supply chain disruption this month, which may be misrepresenting

economic strength across the continent. As a result, JPY remains bid, pulling

USD/JPY well back below the Y112 handle above which progress has been difficult.

- AUD remains acutely weak, hitting new multi-year lows as risk appetite soured

as equities remain weak. Yesterday's disorderly sell-off in US equities remains

top of mind for markets, with volumes healthy headed into the Friday bell.

- Focus turns to Canadian retail sales, US manufacturing/services PMI and

existing  home sales. Numerous Fed speakers are due including  Kaplan, Brainard,

Bostic and Mester. ECB's  Chief Economist Lane is also on the docket.