London Session Recap – July 11, 2014

  • German HICP (Final) inline with forecast/previous reads – m/m at 0.4%; y/y at 1.0%
  • German CPI (Final) inline with forecast/previous reads – m/m at 0.3%; y/y at 1.0%
  • U.K. CB Leading Economic Index inline with previous read at 0.5%

We got economic data in the form of German inflation, but since they are the final reads, as usual, they came inline with earlier reads for the month. The euro rallied a bit from this data release and picked up momentum at the London open, partly with the help of the rebound in European equities after yesterday’s panic drop on the Espirito Santo Bank news.  It was a short-lived rally however as the euro was faded lower within a couple of hours of the open to bring it around break even across the board.

The only other price action of note is in the Canadian Dollar, which seems to have found a bid ahead of this morning’s Canadian Jobs data at 1:30 pm GMT.  It looks like forex traders are pricing in a positive read as the Loonie is up on the session against the majors.:

USD/CAD is down 13 pips (-0.12%) to 1.0634, EUR/CAD is down 19 pips (-0.14%) to 1.4472, and GBP/CAD is down 26 pips (-0.14%) to 1.8217

The forex calendar for the final afternoon U.K./morning U.S. trading session of the week is light with only the aforementioned Canadian Jobs data as the only major economic data point coming up.

The forecast is for the Net Change to dip slightly to 20K vs. 25.6K previous and the unemployment rate to remain steady at 7.0%.  Since it looks like currency traders are building longs ahead of the event, this sets up for a possible “buy-the-rumor, sell-the-news” reaction scenario.  But then again, it all depends on what the actual reads are vs. expectations/previous reads.  Whatever the outcome may be, be very cautions Loonie traders!

And finally, we’ll get the U.S. government’s month budget statement at 7:00 pm GMT.  Not normally a big market mover, but it’s definitely one to watch as economists are forecasting a $79B surplus vs. -$130B deficit last month.  If so, we could see a short-term spike in bullishness for the Greenback, which has been under pressure over the last couple of sessions.  Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together. In forex trading, you get better odds at securing pips when your fundamental analysis is complemented by technical analysis.  Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!