London Session Recap – February 19, 2014

  • U.K. Claimant Count Change: -27.6K vs. -20K forecast; Claimant Count Rate inline with the 3.6% forecast
  • U.K. ILO Unemployment Rate slightly higher than expected: 7.2% vs. 7.1% forecast
  • BOE MPC minutes released: global inflation pressures are weak, eventual rate rises will be gradual

All eyes were on U.K. economic events during the morning London session as we got mixed employment data from the U.K.  The ILO and claimant count change came surprised weaker, but average earnings (including bonuses) ticked higher to 1.1% vs. the 1.0% forecast.  The Bank of England’s Monetary Policy Committee’s meeting minutes came out as well, but as expected, no new insights were noted in this release.

Overall, traders focused on that slight tick up in the ILO unemployment rate number, knocking sterling down against most of the majors in the initial reaction.  GBP/JPY is down 53 pips (-0.31%) to 170.15; GBP/USD is trading slightly below breakeven at 1.6673; and EUR/GBP is down a couple of pips (-0.02%) to .8243.

Besides the rockin’ action in sterling, the Japanese yen is also a big mover on the session, trading in step with the weakness in the Nikkei (down -0.52%).  USD/JPY is currently trading lower 30 pips (-0.30%) to 102.04, and EUR/JPY trading lower 47 pips (-0.35%) to 140.29.

Coming up for the rest of the Wednesday session, we’ve got Canadian wholesale sales data and tier 2 U.S. data in the form of PPI (0.1% forecast vs. 0.4% previous) and housing data (Building Permits and Housing Starts).  Both U.S. housing components are forecasted to tick lower (understandable given the extreme weather conditions), and if we also get a weak producer inflation number, the broad trend in Dollar weakness over the last few sessions may likely continue.  Finally, the FOMC meeting minutes will be released 7:00 pm GMT, so stay on your toes for some late session volatility if we see any new insights on the Taper and/or any changes to the Fed’s economic outlook.

See also:

Asian Session Recap

U.S. Session Recap

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