London Session Recap – April 23, 2014

  • European PMI numbers mostly positive: Flash Manufacturing PMI 53.3 vs. 53 forecast, 53.1 previous; Flash Services PMI 53.1 vs. 52.5 forecast, 52.2 previous
  • U.K. Public Borrowing lower: 6.7B GBP vs. 11B GBP forecast, 8.8B GBP previous
  • No surprise insights from the Bank of England MPC meeting minutes; sparks Sterling weakness

The big drop in the Aussie continued at the London open as European currency traders had a chance to price in the weaker-than-expected CPI data.  The Australian dollar didn’t have a chance to recover and is still down against the majors:

AUD/USD is down 79 pips (-0.73%) to .9285, AUD/NZD is down 66 pips (-0.61%) to 1.0811, and the big mover of the day is AUD/JPY, down 114 pips (-1.19%) to 94.22.

Despite European PMI’s coming in mostly positive, it was the weaker-than-expected Chinese PMI data that was in focus and set off risk aversion behavior than ran from Asia into Europe.  The Japanese Yen is one of the usual benefactors of risk-off flows, and it’s still on the move, adding to its gains for the day.

USD/JPY is down 39 pips (-0.38%) to 102.21, EUR/JPY is down 11 pips (-0.08%) to 141.47, and NZD/JPY is down 41 pips (-0.47%) to 87.74.

And finally, no surprises from the Bank of England’s MPC meeting minutes.  It was a 9-0 vote to keep monetary policy on hold.  The reaction in Sterling was somewhat negative with the lack of rate hike guidance and a wide range of views among the members, but the bears might have found some help from the broad risk-off flows.  Sterling is down against the majors:

GBP/USD is down 18 pips (-0.11%) to 1.6801, GBP/JPY is down 78 pips (-0.46%) to 171.76, and GBP/CHF is down 73 pips (-0.49%) to 1.4807

The afternoon London/U.S. is also pretty packed with data from the forex calendar.  The Canadian retail sales data at 1:30 pm GMT is the most notable, with expectations for a tick lower to 0.5% on the headline from 1.3% previous.  And starting at 2:45 pm GMT, the U.S. will release their manufacturing PMI number (and then 15 minutes later, the U.S. new home sales data is set to be released, with expectations of 450K new homes vs. 440K previous read.

And just after the U.S. session close at 10:00 pm GMT, the Reserve Bank of New Zealand will end their monetary policy meeting and announce what some expect will be a raise in the interest rate to 3.00% from 2.75%.  Be safe Kiwi traders because this is definitely a market moving event.  Stay frosty!

See also:

Asian Session Recap

U.S. Session Recap

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