London Session Recap – April 2, 2014

  • U.K. Nationwide House Prices m/m lower: 0.4% vs. 0.8% forecast, 0.7% previous
  • U.K. Construction PMI also weaker-than-expected: 62.5 vs. 63.0 forecast, 62.6 previous
  • European PPI y/y lower: -1.7% vs. -1.6% forecast; -1.4% previous
  • Final European GDP q/q read revised lower to 0.2% vs. 0.3% forecast/previous
  • U.S. ADP Employment Report: 191K vs. 195K forecast, previous revised up to 178K.

There morning London session was void of any major events, but there were second tier economic data points from the U.K. and Eurozone to ignite a bit of volatility for currency traders. And between the two major economies, it looks like the euro is taking the brunt of sell orders, while sterling surprisingly ticks higher despite the weak data:

EUR/GBP is down 16 pips (-0.20%) to .8277, GBP/USD is up 24 pips (+0.15%) to 1.6653, and EUR/USD is down 4 pips (-0.03%) to 1.3785.

Another mover on the session is the New Zealand Dollar.  It has taken a broad hit against the majors, possibly after the weak ANZ Commodity prices number during the Asia session.  This is usually not a widely followed economic data point, which goes to show that traders are a lot less willing to hold on to the Kiwi at this time after it’s big rally over the past year.

NZD/USD is down 30 pips (-0.72%) to .8572, AUD/NZD is up 98 pips (+0.92%) to 1.0792, and NZD/CAD is down 88 pips (-0.93%) to .9438.

For the Wednesday afternoon London/morning U.S. session overlap,  we just got the ADP Employment Survey.  It came in a few ticks under forecast but the previous number was revised higher.  There was an initial spike higher in favor of the Greenback, but it looks like the move is already being faded.

And at 2:00 pm GMT, the U.S. will release its Factory Orders number with expectations for a 1.2% read vs. -0.7% previous.  Like the ADP number, it is a tier two event which means it may be a catalyst for a spike in volatility if the release is way off from expectations and/or the previous read.

Finally, we are seeing yet another session of broad global risk sentiment in favor of risk taking, which looks to be fading after the positive ADP number.  Any positive U.S. employment news is probably being interpreted by currency traders as another argument for more Fed Tapering (i.e., reduction of easy money and credit).  This could make the rest of the Wednesday session a bit tricky, so as always, be wary of all risks and have plans already set to manage them.  Stay frosty!

See also:

Asian Session Recap

U.S. Session Recap

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