London Session Recap – March 12, 2014

  • European Industrial Production y/y: +2.1% vs. 1.9% forecast; 1.2% previous
  • European Industrial Production m/m: -0.2% vs. 0.5% forecast; -0.4% previous

The morning London session was light on economic data, with only European industrial production data being released. But that doesn’t mean currencies aren’t on the move.

Commodity dollars (comdolls), like the Aussie and Kiwi, are taking a hit on the session, most likely due to the drop in commodity prices, fears of emerging market instability (mainly a China slowdown), and the geopolitical issues we’re seeing in Ukraine and in Turkey. AUD/USD is down 38 pips (-0.43%) to .8934, NZD/USD is down 24 pips (-0.28%) to .8442.

These issues have spark risk aversion behavior as well, most notably boosting the Japanese yen on the session against the majors: USD/JPY is down 23 pips (-0.23%) to 102.77, EUR/JPY is down 20 pips (-0.14%) to 142.53, and GBP/JPY is down 60 pips (-0.36%) to 170.50.

Finally, the euro is up against most majors. Not sure if it is because of the mixed industrial production numbers or technicals, but it’s certainly taking advantage of comdoll weakness: EUR/USD is up 10 pips (+0.07%) to 1.3869, EUR/CAD is up 73 pips (+0.48%) to 1.5459, and EUR/AUD is up 76 pips (+0.50%) to 1.5511.

The forex calendar is clear for the rest of the Wednesday session, so European market risk sentiment could carry over into the U.S. markets. Also, we are heading into a Reserve Bank of New Zealand monetary policy decision and Australian jobs numbers report when Asia opens up for trade, so volatility may settle, repositioning, and/or profit taking may occur in the comdolls before those events.  Stay frosty!

See also:

Asian Session Recap

U.S. Session Recap

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