London Session Recap – February 28, 2014

  • France comes out with weaker-than-expected Consumer Spending and PPI data. PPI y/y at -1.2% vs. -0.1% forecast
  • Swiss KOF Leading Indicator better-than-expected at 2.03 vs. 2.00 forecast
  • European HICP (Flash) data higher than forecast: headline y/y 0.8% vs. 0.7 forecast
  • European Unemployment Rate inline with expectations at 12.0%

We’ve got currencies moving all over the place in the morning London session thanks to a slew of European data points.

The big catalyst of the morning session was the European HICP data, which ticked higher both in the headline number and the core number (1.0% vs. 0.8% forecast).  Euro bulls have been worried that deflation may creep up into the Eurozone, so this piece of inflation data definitely keeps those fears at bay for now.

With another positive data point contributing to the string of good economic news for Europe, the euro expectedly rocketed higher across the board on the news, and continues to hold its gains on the session: EUR/USD is up 89 pips (+0.65%) to 1.3800, EUR/JPY is up 62 pips (+0.47%) to 140.62, and EUR/GBP is currently up 47 pips (+0.56%) to .8260.

Outside of Europe, the Kiwi dollar continues its strength from yesterday’s session–NZD/USD is up 42 pips (+0.51%) to .8408, NZD/JPY is up 26 pips (+0.32%) to 85.69.  And the Canadian dollar continues to feel no love from forex traders as it continues its slide ahead of important data from Canada:  EUR/CAD is currently up 111 pips (+0.72%) to 1.5354 and NZD/CAD is up 58 pips (+0.63%) to .9359.

Coming up for the rest of this week’s final forex trading session, we’ve got GDP data from both Canada and the U.S. at 1:30 pm GMT.  Expectations for both are to come in below previous reads, with Canada’s monthly number expected to come in negative (-0.3% vs. 0.2% forecast).  Both should be big catalysts for their respective currencies, especially if we see big deviation from forecasts.

Then, starting at 2:45 pm GMT, the U.S. is releasing its Chicago PMI, University of Michigan Sentiment (final), and pending home sales data. These are all tier 2 reports with mixed expectations, so unless we see big surprises, the opposing reads could limit volatility in the U.S. dollar after their release.  Be prepared and stay frosty traders!

See also:

Asian Session Recap

U.S. Session Recap

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