London Session Recap – April 30, 2014

  • German Retail Sales m/m inline with -0.7% forecast, weaker than 0.4% previous
  • French PPI m/m weaker at -0.4% vs. -0.1% forecast/previous
  • European Flash HICP m/m: 0.7% vs. 0.8% forecast, 0.5% previous
  • FOMC Monetary Policy Statement at 7:00 pm GMT

Currencies were on the move for the Wednesday London session thanks to a cornucopia of economic data from Europe. With so much data from all over that ranges from employment data to inflation data, and it was the broad read on inflation in Europe that was the most highly anticipated event, coming in lower than forecast but better than previous.  Euro volatility spiked after the Flash HICP release, ultimately rallying on the news:

EUR/USD is up 39 pips (+0.28%) to 1.3850, EUR/JPY is up 22 pips (+0.16%) to 141.97, and EUR/GBP is up 23 pips (+0.29%) to .8230

At the same time, the volatility took off in the Swiss Franc, supporting the currency against most of the majors on the session:

USD/CHF is down 25 pips (-0.29%) to .8806, GBP/CHF is down 38 pips (-0.26%) to 1.4818, and probably the biggest moving pair on the session, CAD/CHF is down 36 pips (-0.46%) to .8030

Starting at 1:15 pm GMT, we’ll get the ADP Employment Report, which gives a read on the private sector’s employment health and a hint on what we may see this Friday from NFP. Expectations are for a 210K positive net change vs. the 190K previous read.

Then at 1:30 pm GMT, we’ll get Canadian and U.S. GDP data, both expected to come in below previous reads. At 2:45 pm GMT, Chicago PMI will be on tap to give us another read on U.S. manufacturing conditions in the mid-West, expected to come in higher at 57.0 vs. 55.9 previous.

And the big catalyst of the day will most likely be the FOMC’s monetary policy decision at 7:00 pm GMT.  Expectations are for no changes to U.S. interest rates and a reduction of their bond purchasing program by $10B U.S. What is more important for forex traders to listen out for is a hint of when we will see the FOMC tighten interest rates.

See also:

Asian Session Recap

U.S. Session Recap

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