London Session Recap – January 10, 2014

  • Swiss  CPI m/m: -0.2% vs. -0.1% forecast; Unemployment rate m/m: inline at 3.2%
  • U.K. Manufacturing Production m/m: 0.0% vs. 0.4% forecast
  • Canadian Unemployment rate m/m: 7.2% vs. 6.9% forecast; Net Employment Change: -45.9K vs. 14.1K forecast
  • U.S. Unemployment Rate m/m: 6.7% vs. 7.0% forecast; Net Employment Change: 74K vs. 195K forecast

Lots of data from the morning London session, but the only mover of the session was sterling on a weaker-than-expected manufacturing production number.  Sterling took a broad hit after underperforming on this data point with GBP/USD dropping 50 pips on the release.

The big  reports of the day is the employment data.  Both Canada and the U.S. released weaker-than-expected numbers, both a big surprise with the U.S data causing a ruckus in the currency markets.  The weakness in jobs data was attributed to the abnormally cold weather conditions in North America, and because of how big a surprise it was, it challenges the strong trend of improving conditions, mainly in the U.S.  Traders are factoring this into the potential of future Tapering from the FOMC by selling off the Greenback across the board.  USD/JPY is down 100 pips after the report, currently trading around the 104.00 handle; down against the euro by around 80 pips, currently trading around 1.3680.  This data should be the main driver for the rest of the U.S. session, most likely pushing risk assets and the U.S. dollar under pressure.

The Loonie is also taking a big hit across the board off of its weak employment data, currently down against the euro by 130 pips and down 80 pips against the Japanese yen.  The Canadian dollar will also most likely remain under pressure for the remainder of the trading week.

See also:

Asian Session Recap

U.S. Session Recap

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