London Session Recap – February 5, 2014

  • European Services PMI mostly weaker-than-expected
  • European Retail Trade m/m: -1.6% vs. -0.7% forecast
  • U.K. CIPS/Markit Services PMI weaker-than-expected: 58.3 vs. 59.0 forecast

We saw mostly weaker-than-expected data from the U.K. and Europe to spark a little bit of volatility for currencies during the morning London session.

It started with mostly weaker-than-expected Services PMI data from Europe dragging the euro lower on the session against most of the major currencies. Germany came in at 53.1 vs. 53.6 forecast, while France did beat the forecasted number of 48.6 with a read of 48.9.  Unfortunately, while better-than-expected, the France number is still below the 50.0 level which signals contractionary conditions.

Europe also got a much weaker-than-expected retail sales number to add to the negative data for the euro on the morning.  While a big negative surprise, volatility remained relatively calm with EUR/USD only down 4 pips (-0.04%) on the session to 1.3516. It’s have a much tougher day against the commodity dollars and Japanese yen: EUR/CAD down 30 pips (-0.20%) to 1.4945 and EUR/JPY down 60 pips (-0.45%) to 136.74.

The British pound is having a much harder day against all of the majors as its services PMI number came in weaker-than-forecast and below its previous read of 51.9 at 51.6.  GBP/USD is down on the session 50 pips (-0.31%) to .6271.

For the rest of the London session, we have jobs data from the U.S. in the form of the ADP Employment survey, forecasted to be lower than the previous number (187K forecast vs. 238K previous), and we have the Canadian building permits number, which is expected to come in above the previous read at 1.5% vs. -6.7% previous. The day will be capped off at 10:00 am ET with the ISM non-manufacturing PMI number, with the expectation of 53.7 vs. the previous read at 53.0.

See also:

Asia Session Recap

U.S. Session Recap

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