London Session Recap – July 2, 2014

  • Spanish Unemployment Change: -122.7K vs. -97.3K forecast, -111.9K previous
  • U.K. Nationwide House Prices (sa) ticks higher: 1.0% vs. 0.5% forecast, 0.7% previous
  • U.K. Construction PMI:   vs. 59.8 forecast, 60.0 previous
  • European PPI m/m inline with -0.1% previous; y/y came in with forecast at -1.0%, higher than -1.2% previous

Another day of euro weakness for the London session, as well as Pound strength that’s becoming the norm for forex traders these days.

The euro started taking in sell orders right at the session open, most likely on the big negative surprise from Spanish unemployment data.  We saw the shared currency go into consistent sell mode, all the way through the lower-than-expected European PPI read at 10:00 am GMT.  Euro pairs are mostly down on the session, but it looks like they’re finding a bottom ahead of the U.S. session:

EUR/USD is down 15 pips (-0.11%) to 1.3663, EUR/JPY is down 20 pips (-0.15%) to 138.65, and EUR/GBP is down 11 pips (-0.14%) to .7959

Sterling also got another boost for buying sentiment thanks to better-than-expected construction PMI data.  The buying reaction was quick, but seems to have been faded in a few of the Pound pairs to limit Sterling’s strength on the session.  The exception seems to be in GBP/AUD (up 99 pips or +0.55%), which is still feeling the affects of the weaker-than-expected Aussie trade balance data during the Asia session.

For the afternoon London and U.S. trading session we’ll get a couple of U.S. employment data points, as well as manufacturing data.

At 12:30 pm GMT, we’ll get the Challengers Job Cuts data and 1:15 pm GMT we’ll see the ADP Non-Farm Employment Survey number.  Both are early indicators of what we may get from the U.S. government’s Non-Farm Payroll report later in the week.  We may not see volatility rise in the Greenback until after the ADP number, not only because it comes out later, but also because it is more closely watched and correlated to the NFP report.  The forecast for the ADP number is around 205K net job adds, so be ready if an outlier is printed.

At 3:00 pm GMT, we’ll get the U.S. factory orders number for another snapshot of the manufacturing sector.  This economic event isn’t usually a market mover, but it’s good to be aware of its presence with a forecast of a -0.3% dip vs. 0.7% previous.

And finally, Fed Chair Janet Yellen will be giving a speech at the International Monetary Fund meeting in Washington, D.C. today.  It’s not expected that her speech will bring to light any new changes to the current Federal Reserve outlook, but being the most influential person on the Greenback, it’s a must to be aware of her speeches and possible surprise comments as they have the potential to spark huge volatility. Stay frosty forex traders!

See also:

Asia Session Recap

U.S. Session Recap

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