Traders rebuff ECB rate cut odds for October after poor PMI data

• France September flash services PMI 48.3 vs 52.5 expected
• Germany September flash manufacturing PMI 40.3 vs 42.4 expected

For some context, these odds have moved up quite a fair bit in the last two days from ~35% right after the Fed decision last week. Things are certainly heating up for the ECB despite policymakers saying that they would prefer to skip a move in October.

In adding to the poor readings above, the report details also show further easing in cost pressures towards the end of Q3. It might not quite translate into the hard data i.e. consumer prices just yet. But it is a development worth noting at least.

As traders now try to force the ECB’s hand, the euro is falling to fresh lows on the day with EUR/USD at 1.1110 currently. The 200-hour moving average for the pair is seen at 1.1104 and may provide some near-term support for now.

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