London Session Recap – May 21, 2014

  • European Current Account: 18.8B EUR vs. 21.8B EUR previous
  • U.K. Retail Sales (inc Auto Fuel) m/m: 1.3% vs. 0.4% forecast, 0.5% previous; (ex Auto Fuel) m/m: 1.8% vs. 0.5% forecast, 0.1% previous
  • Bank of England’s Monetary Policy Committee meeting minutes shows 9-0 vote to keep rates and hold quantitative easing

The big mover of the morning London session is the British Pound after a big upside surprise in U.K. retail sales data. All forms of the data point (both including and excluding Auto) beat both expectations and previous reads big time. Not surprisingly, we saw a big upside boost to Sterling against most of the majors and it’s still going:

GBP/USD is up 60 pips (+0.37%) to 1.6898, EUR/GBP is down 41 pips (-0.52%) to .8092, and GBP/CHF is up 86 pips (+0.58%) to 1.5101

We also saw broad strength continue to flow into the Japanese Yen after today’s Bank of Japan’s monetary policy meeting.  The BOJ held back in new stimulus measures as it expects its recovery to continue: USD/JPY hit three month lows around 100.85 before pulling back up above the 101.00 area.  The big mover of the day among the yen pairs is AUD/JPY (down 40 pips or -0.42% to 93.24), with the Aussie still feeling the dovish sentiment from the RBA meeting minutes yesterday.

The afternoon London/morning U.S. session calendar is void of relevant economic data releases, but we will get a potentially big market mover in the form of the FOMC meeting minutes at 7:00 pm GMT.  The expectations are for no new insights into the Fed’s decision for Tapering at the last meeting, or how it will handle interest rates and bond purchases in the future.  But being the most watched central bank in the world, you should pay close attention to the release because any unexpected rhetoric will have a big impact on all markets.

Finally, we have speeches from various Federal Reserve members scheduled through out the calendar today, including one from Fed Chair Janet Yellen. Like the meeting minutes, don’t expect any new insights or big reactions, but you should be aware of them in case there are any surprises.

Unless we get any new surprises, keep an eye out for the Japanese Yen and Sterling as the momentum seems pretty strong with both currencies. Stay frosty!

See also:

Asian Session Recap

U.S. Session Recap

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  • ForExchange

    Hi PipDiddy,

    can you maybe write about oil and gold also in your session recaps? These events are also in the Forex Calendars and we can trade them just like currencies.

    Thanks,
    ForExchange

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