Overview: The US dollar is narrowly mixed against the major currencies. The dollar-bloc currencies are softer, with the Australian and New Zealand dollars pushed lower by poor data. The euro is posting corrective upticks after the $1.15 area held yesterday, and Italy may cut the budget deficit projected for 2021. The dollar eased to a three-day low against the yen, but ranges are tight. Sterling is recovering back to $1.30. Among emerging market currencies, the central and east European currencies are being helped by the euro’s recovery, while poor CPI is weighing on the Turkish lira. The Indian rupee has yet to stabilize and fell to new record lows today. Singapore’s poor Nikkei PMI fell to 49.6 from 51.1 in August. It is the first sub-50 reading in two years, and as a regional hub, Singapore’s contract likely is a poor omen. Hope that EC President Junker is wrong and Italy is not headed for a Greek-like tragedy has helped Italian bonds and stock stage a recovery today. Italy’s stocks are up about 0.5%, a little more than the Dow Jones Stoxx gain of about 0.3% in late morning activity. Italy’s 10-year bond yield is off 10 bp to 3.34%, while core bond yields are around two basis points higher. Oil prices are firm. US shares are trading higher in Europe, and the S&P 500 is trading about 0.25% better.

EMU PMI: The eurozone service and composite PMI were reported. The service PMI was in line with the flash (54.7), but the composite was revised slightly lower to 54.1 from 54.2. The signal, however, is broadly the same. The composite is the lowest since November 2016. Germany disappointed. The final Germany services PMI was revised to 55.9 from 56.5 of the flash. The composite was revised to 55.0 from 55.3 (and 55.6 in August). France surprised to the upside with services revised to 54.8 from 54.3. This lifted the composite to 54.0 from 53.6 (and 54.9 in August). Spain softened a bit too, with services PMI slipping to 52.5 from 52.7, and the composite falling to 52.5 from 53.0. Italy offered a pleasant surprise. The services PMI rose to 53.3 from 52.6 and the composite improved to 52.4 from 51.7, snapping a two-month decline. The manufacturing sector can be seen as partly a function of exports, while services are less traded and more of a read on the domestic economy.