London Session Recap – May 7, 2014

  • Swiss Unemployment rate inline with previous and forecast at 3.2%
  • German Factory Orders weak: -2.8% vs. 0.3% forecast, 0.9 previous
  • France prints weak data: Industrial Production -0.7% vs. 0.3% forecast, 0.1% previous; Manufacturing Production -0.7% vs. 0.1% forecast, 0.3% previous

Forex price action was mixed in the morning London session with weak data from Europe adding to volatility sparked by the news from Asia.  The Kiwi selloff–ignited by intervention comments from the RBNZ to jawbone the currency lower–found follow through, making the Kiwi the big loser among the majors on the session:

NZD/USD is down 60 pips (-0.69%) to .8676, NZD/JPY is down 60 pips (-0.68%) to 88.20, and AUD/NZD is up 75 pips (+0.71%) to 1.0759

We also saw weak European data from both France and Germany released just before the London open to wake up euro traders, who reacted with quick sell moves.  But for the most part, it was a limited sell off as buyers stepped in as soon as London opened up and pushed the shared currency up to its current levels, around breakeven on the Wednesday session against its major counterparts.

The afternoon London session/morning U.S. session is light on economic events with releases starting at 1:30 pm GMT.  This includes Canadian building permits and low tier U.S. data in the form of unit labor costs and non-farm productivity data.  At 8:00 pm GMT, we’ll get the U.S. consumer credit data.  These events are mid-tier or lower, meaning the probability of a big reaction is low without a big surprise in the actual numbers.

At 3:00 pm GMT, Federal Reserve Chair Janet Yellen will speak before the Joint Economic Committee.  She’s expected to re-iterate recent rhetoric that while they’re seeing improving economic data, the FOMC will remain accommodative while continuing to observe employment and inflation conditions.  This is not likely to be a market mover, but something to be very aware of.  Stay frosty!

See also:

Asian Session Recap

U.S. Session Recap

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