London Session Recap – March 31, 2014

  • Swiss KOF Leading Indicator: 1.99 vs. 2.03 previous
  • U.K Net Consumer Credit: 0.6B GBP vs. 0.7B GBP forecast; Mortgage Approvals: 70.3K vs. 75K forecast
  • European Inflation data weaker: HICP Headline y/y: 0.5% vs. 0.6% forecast, 0.7% previous; HICP Core 0.8% vs. 0.8%, 1.0% previous
  • ECB member Nowotny comments that the Eurozone recession is over

The weak inflation data renewed speculation among currency traders that deflation is a fight that just may be around the corner for Europe (causing the euro to drop), but it was Nowotny’s comments that the Eurozone had come to an end. The euro drop was quickly faded after the comments, pushing the euro up for the day.

EUR/USD is up 47 pips (+0.34%) to 1.3798, EUR/JPY is up 102 pips (+0.72%) to 142.41, and EUR/NZD is up 101 pips (+0.64%) to 1.5960.

For the afternoon London/morning U.S. session overlap,  Canadian GDP m/m is a potential market mover for Loonie pairs at 12:30 pm GMT.  Expectations are for a 0.4% read vs. -0.5% previous and it looks like forex traders are pricing that in ahead of the event; the Canadian dollar is up on the session.

USD/CAD is down 17 pips (-0.18%) to 1.1037, CAD/JPY is up 53 pips (+0.58%) to 93.47, and GBP/CAD is down 16 pips (-0.08%) to 1.8381.

And at 1:45 pm GMT, the U.S. will release the Chicago PMI number, forecasted at 59.5 vs. 59.8 previous.  Both events are second tier, which means we most likely won’t see big moves without outsized surprise reads.

Finally, we are seeing broad risk sentiment in favor of risk taking across the globe (Nikkei 225 +0.90%, FTSE 100 +0.20%) which means safe havens like the Japanese Yen and U.S. dollar (Dollar index -0.17%) may continue to feel pressure for the rest of the session.  Stay frosty!

See also:

Asian Session Recap

U.S. Session Recap

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