London Session Recap – March 25, 2014

  • German IFO data mixed: Expectations at 106.4 vs. 107.7 forecast; Business climate at 110.7 vs. 110.9 forecast; Current Conditions 115.2 vs. 114.5 forecast
  • U.K. inflation data comes in mixed: headline CPI y/y inline with forecast at 1.7%, below 1.9% previous; Input and Output prices (unadj.) lower than expected and previous reads
  • U.K. BBA Mortgage Approvals: 47.55K vs. 50K forecast, 49.34K previous
  • U.K. Distributive Trades: 13% vs. 28% forecast, 37% previous

Lots of U.K. and European data to spark volatility in the morning London session, with the comdolls on the move along with euro and sterling pairs.

Euro traders seem to be focusing on the fact that German IFO data came in mostly weaker, not only below forecast, but also below previous reads in the cast of IFO expectations and business climate.  The euro is taking a hit across the board on the session:

EUR/USD is down 28 pips (-0.21%) to 1.3808 and EUR/GBP is down 24 pips (-0.29%) to .8361.

Sterling is also on the move, surprisingly mostly up after lower inflation, housing, and retailer data. This is probably on broad risk-on sentiment rising as fears subside a bit over the Ukraine-Russia tensions issue. Comdolls are also up on the sentiment, as well as speculation growing that we may see China inject stimulus to combat a weakening economy.

AUD/JPY is up 37 pips (+0.39%) to 93.68, GBP/CHF is up 63 pips (+0.44%) to 1.4585, and EUR/CAD is down 24 pips (+0.16%) to 1.5458.

The rest of the Tuesday session is stacked with U.S. housing data to give traders fuel to spark more volatility.  At 1:00 pm GMT, S&P Case-Shiller Home Price and FHFA House Price data, and New Home Sales will be released at 2:00 pm GMT. All data points are expected to come in slightly lower than previous reads.

Most notable for the session is the U.S. consumer confidence number, also to be released at 2:00 pm GMT. This data point is forecasted to come in slightly higher than previous at 78.5 vs. 78.1 prev.  It should be a volatile session for the Greenback, especially if we see new developments on the geopolitical front.

See also:

Asian Session Recap

U.S. Session Recap

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