London Session Recap – May 1, 2014

  • Labour Day Holiday: European Banks Closed
  • U.K. Nationwide House Prices better-than-expected: 1.2% vs. 0.6% forecast, 0.5% previous
  • U.K. Mortgage Approvals lower all around: 67.1K vs. 72.0K forecast, 69.6 previous
  • U.K. Manufacturing PMI surprises to the upside: 57.3 vs. 55.4, 55.8

European banks were on holiday, but thankfully we got data from the U.K. to spark volatility in the forex markets.

There was actually quite a few events to fill up the U.K.’s economic calendar, but the event of the morning London session was the manufacturing PMI data.  It was a big surprise to the upside, making a 5-month high and showing signs of a healthy recovery. Traders reacted with a quick bid for Sterling across the board, but it was neither a big move or long lasting.  Overall, the British Pound is up on the session:

GBP/USD is up 23 pips (+0.14%) to 1.6893, GBP/JPY is up 37 pips (+0.22%) to 172.75, and GBP/AUD is up 69 pips (+0.38%) to 1.8224

The afternoon London session is coming up quick and it should be a busy one thanks to a steady stream of U.S. economic data on the way.

It all begins at 1:30 pm GMT with U.S. unemployment claims, PCE price index (the preferred inflation data by the Fed), and personal income and spending data.  Expectations are for better-than-expected reads on the employment data and a tick higher on the Core PCE Index.  And a little over an hour later is the Final Manufacturing PMI number at 2:45 pm GMT.  This is a low tier event and expectations are for the final read to remain at 55.4.

At 3:00 pm GMT, we’ll get the next round of U.S. data with the focus on the ISM Manufacturing PMI data. This is a expected to tick higher from the previous read (54.3 vs. 53.7 forecast).  If better-than-expected, this could help reverse the Greenback’s fortunes after taking a hit on yesterday’s weak GDP number.

Finally, Fed Chair Janet Yellen will be giving a speech to community bankers in Washington, but expectations are that high we won’t see anything different from the FOMC statement released just yesterday.

See also:

Asian Session Recap

U.S. Session Recap

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.

In forex trading, you get better odds at securing pips when your fundamental analysis is complemented by technical analysis.

 Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!