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Wednesday, February 22, 2012

EU flash PMI all below consensus

The flash PMIs are coming in for Europe, and they are generally below consensus. The markets seem to be taking the information in stride, and are not over reacting. (More signs of a healthy market.)

IMO, the market reaction is the right one. I already made the case for a lower Euro to support a stronger Eurozone PMI in the post 'positive chatter'.  Below is an update on this chart.

The above chart tells me the PMIs were relatively strong, and within trend, despite a stronger (or flat) Euro. It also tells me the Euro's down side maybe limited.  The Eurozone  Euro sweet-spot maybe near 1.20 EU/USDol, which may also limit its downside.

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