London Session Recap – June 10, 2014

  • Swiss Unemployment inline with previous read of 3.2%, higher than 3.1% forecast
  • French Industrial Production m/m inline with 0.3% forecast, -0.4% previous
  • Swiss Retail Sales y/y: 0.4% s. 3.4% previous
  • U.K. Manufacturing Production m/m  inline with 0.4% forecast, above 0.1% previous; y/y is up 4.4% vs. 4.0% forecast, 3.5% previous

European region currencies went into sell mode once again, lead by strong selling in the euro and followed by weakness in the Sterling and Swiss Franc.

We saw mostly weak data from the European region with the exception of a positive surprise for U.K. production data. This further supports the ECB’s decision to cut interest rates last week, and fuels speculation for aggressive quantitative easing in the near future.  Logically, this spells trouble for the euro, and the Swiss Franc is going down with it as traders speculate that the Swiss National Bank may have to intervene to defend the 1.2000 handle on EUR/CHF if retested:

EUR/USD is down 55 pips (-0.41%) to 1.3536, EUR/JPY is down 78 (-0.56%) to 138.52, EUR/NZD is down 86 pips (-0.56%) to 1.5902.

Outside of the European region, it’s another day of Japanese Yen strength, possibly by forex traders lightening up their Yen shorts before this week’s Bank of Japan meeting.  It is expected that the Bank of Japan will say that the current stimulus program in Japan will not need to be expanded. Yen pairs are mostly down across the board:

USD/JPY is down 19 pips (-0.19%) to 102.31, GBP/JPY is down 50 pips (-0.29%) to 171.70, and CAD/JPY is down 21 pips (-0.23%) to 93.77

Coming up in the afternoon London trading session/U.S. session is a light economic calendar.  We just got the NFIB Business Optimism Index number from the U.S. coming in at 96.6 vs. 96.1 forecast.  This is not a widely followed economic data point, but keep an eye on the Greenback for a reaction.

The remaining events of the day will be released at 3:00 pm GMT to include JOLTS job openings data and wholesale inventories data from the U.S.  The JOLTS employment data is more closely followed of the two and it is a second tier report, so if it comes in far off from the 4.02M forecast or 4.01M previous, it could be a short-term market mover.

Finally, equity markets are mixed with Europe up and Japan down, so risk sentiment may not be a strong driver in today’s session. Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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