London Session Recap – February 18, 2014

  • European Current Account 21.3B EUR vs. 23.3B EUR previous
  • U.K. CPI y/y lower at 1.9% vs. 2.0% forecast/previous
  • German ZEW Economic Sentiment weaker: 55.7 vs. 61.5 forecast; Current Conditions better-than-expected 50 vs. 44
  • U.S. Empire State Survey weaker: 4.48 vs. 9.00; Net Long-term TICS Flows weaker at -$45.9B vs. $30.0B forecast

Quite a busy morning for currencies, with mixed data and directional biases for the major currencies.

We got mixed data from the Euro zone, but it seems like traders were focused on the positive German ZEW current conditions number and decent current account data. The euro is up against the majors on this mornings data: EUR/JPY up 119 pips (+0.85%) to 140.80; EUR/USD up +40 pips (+0.31%) to 1.3745; and EUR/GBP is up 29 pips (+0.35%) to .8227.

The British pound is not doing as well after a surprise tick lower to its yearly CPI number, slowing for the first time in 4 years and below the Bank of England’s 2% target.  Despite growth, this may give the BOE an argument to leave rates as-is, sparking a mildly bearish reaction in Sterling from which it seems it has already recovered from. GBP/USD is only down 10 pips (-0.06%) to 1.6701 on the session; GBP/JPY +82 pips (+0.48%) to 171.09 thanks to bearish BOJ news during the Asia session.

Finally, we got a weaker-than-expected read from the U.S. Empire State Survey and the TICS flows data. This sparked the weak Greenback sentiment that we’re currently seeing as the U.S. Dollar index creeps lower, currently trading around 80.55.

The only significant event for the rest of the Tuesday session is the NAHB Builders survey, with forecast for the index at 56 vs. 56 previous.  With the Greenback on the move this could add fuel to the bearish fire if weak, or help slow it down if we see a positive read at 10:00 am EST.

See also:

Asian Session Recap

U.S. Session Recap

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