London Session Recap – April 28, 2014

  • German Import Prices m/m: -0.6% vs. -0.1% forecast; -3.3% y/y vs. -2.8% forecast

Sterling was the main mover of the session on a combination of positive flows ahead of tomorrow’s preliminary U.K. GDP read (expected to tick higher) and merger and acquisition (M&A) news between Pfizer and U.K. drugmaker AstraZeneca for $100B. Combined, it was a positive boost for the British Pound, which is up against most majors on the session:

GBP/USD is up 47 pips (+0.28%) to 1.6843, GBP/JPY is up 77 pips (+0.45%) to 172.38, and GBP/NZD is probably the biggest mover of the day, up 135 pips (+0.69%) to 1.9708

The Japanese Yen is also a mover on the session, reversing its gains from Friday’s risk-off moves on Ukraine tensions going into the weekend.  M&A news and the avoidance of full out war may be what is prompting a move back to risk assets to start the week, which is typically not-so-good for the Yen.  Also, reports that Japanese insurers are looking overseas for yield is causing capital flows out of Japan, and adding to yen pressure:

USD/JPY is up 15 pips (+0.13%) to 102.33, EUR/JPY is up 49 pips (+0.35%) to 141.83, and AUD/JPY is up 23 pips (+0.25%) to 94.97

The first London/U.S. session of the week is pretty light on data with only U.S. pending home sales to be released at 3:00 pm GMT.  Expectations for the monthly read is for a 0.7% rise vs. -0.8% previous.  This data has been in a downtrend, so a positive read could surprise traders and ignite swift moves in currencies, mainly the Greenback.

We also have ECB President Mario Draghi giving a speech at the joint conference of the German government’s coalition party groups at 3:30 pm GMT.  With the ECB possibly considering new monetary policy measures, any sort of hints from Draghi on the ECB’s outlook could spark big short-term volatility for the currency markets.  Stay frosty friends!

See also:

Asian Session Recap

U.S. Session Recap

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