London Session Recap – January 15, 2014

  • Swiss Retail Sales m/m positive: +4.2% vs. 1.7% forecast
  • European Trade Balance better-than-expected: 17.1B EUR vs. 16.5B EUR forecast
  • Weak China data sparks moves into safe haven currencies
  • U.S. Core PPI m/m higher: 0.3% vs. 0.1%; Empire State Survey also positive

We mostly got tier 2 and 3 economic reports from Europe to start the London session, so it was probably the weak data from China (new loans down to 483B yuan vs. 589B yuan forecast) that was the catalyst we’re seeing for slight risk aversion behavior (mainly to the Dollar), and weakness in one of China’s major trading partners: Australia.  The Aussie is down a bit across the board, currently at .8913 against the Greenback–down almost 50 pips since the China data was released.

We just got a boost for the U.S. dollar thanks to a positive surprise from the U.S. PPI core number and big positive surprise from the Empire State Survey.  The Greenback is up across the board, most notably against sterling as GBP/USD dropped 60 pips on the release and now testing the previous week low around 1.6337.  Look for further support for the Greenback for the remainder of the Wednesday session.

For the rest of the London session, no major economic data to take note of, but there are central bank speeches going on through the morning from the BoE’s Carney, Cunliffe, Furse and Sharpe at the U.K. Parliament’s Treasury Committee hearing, and the Fed’s Evans speaking on the economy.

In the afternoon U.S. session, we’ll see the U.S. Beige book report which provides an overview of the U.S. economy to the Fed members from various sources including banks, businesses, economists, etc. Not always a market mover, but if there is a big surprise, it can push currencies around during the lighter liquidity environment of the afternoon U.S. session.

See also:

Asian Session Recap

U.S. Session Recap

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