London Session Recap – June 12, 2014

  • German Wholesale Price Index: -0.9% vs. -1.3% previous
  • French HICP inline with 0.8% forecast/previous
  • European Industrial Production is better-than-expected: 0.8% vs. 0.5% forecast, -0.4% previous

The big story of the morning London session continues to be the New Zealand Dollar, continuing its rally after the Reserve Bank of New Zealand hiked interest rates once again during the Asia session.  And if that wasn’t enough for Kiwi bulls, they hinted at possibly a few more before the end of the year!  The spike in Kiwi didn’t stop as European traders decided to jump in on the momentum to put the Kiwi up big time for the Thursday trading session:

NZD/USD is up 143 pips (1.68%) to .8676, NZD/JPY is up 137 pips (1.57%) to 88.56, and NZD/CHF is up 126 pips (+1.65%) to .7808

Outside of the big story from NZ, we’ve got a rally in the British Pound off of renewed speculation that we’ll see interest rate hikes from the Bank of England as U.K. economic data continues to improve as recently seen through this week’s positive unemployment data.  Sterling is up against the majors today, with exception of course against the surging New Zealand Dollar:

GBP/USD is up 38 pips (+0.23%) to 1.6823, GBP/JPY is up 44 pips (+0.26%) to 171.74, and EUR/GBP is down 20 pips (-0.25%) to .8037

To close out the London session, we’ll see a mix of bottom and top tier events from both Canada and the U.S.

Starting at 1:30 pm GMT, we’ll get housing data from Canada in the form of capacity utilization and the housing price index.  From the U.S., we’ll see the weekly unemployment claims number and the event of the hour, the U.S. retail sales data. The headline number is forecasted to come out at 0.6% vs. 0.1% previous, and since this is a tier one economic event, be on the look out for a spike in volatility for the Greenback on the release if its off of expectations or previous reads. If it’s a big enough surprise, then it could have a short-term effect on broad risk sentiment as well.

At 3:00 pm GMT, we’ll get U.S. business inventory data, with expectations for the number to come inline with the previous read at 0.4%. And last but not least on the forex calendar, we’ve got central bank speeches from Bank of Canada governor Poloz (4:15pm GMT) and Bank of England governor Carney (7:00 pm GMT) to close out the session.  Speeches are normally not market movers, but because they are the heads of some of the most influential central banks in the world, we should of course be aware of their actions in case there is a surprise for the markets.  Stay frosty friends!

See also:

Asia Session Recap

U.S. Session Recap

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