- Swiss UBS Consumption Indicator: 2.06 vs. 1.80 previous
- Swiss KOF Leading Indicator weaker: 98.1 vs. 101.0 forecast, 100.5 previous
- European Sentiment ticks up: 102.2 vs. 101.9 forecast, 102.1 previous
Typical of FOMC decision days, volatility was tight but there were a few directional moves for forex traders to grab a few pips from during the morning London session.
First, the main directional mover of the session is the Greenback, up ahead of highly anticipated U.S. events in the Wednesday session. Forex traders are speculating that GDP data will surprise to the upside and that we’ll see hawkish rhetoric towards future monetary policy from the Fed. So, the Buck is on the move, continuing the small rallies started in Asia against the majors. The most notable is USD/JPY, which is up 11 pips (+0.12%) to hold above the 102.00 major psychological handle.
We did see positive data from Switzerland today, which looks like it brought about rare support for the Swiss Franc on the session, and the Euro found a bit of support as well off of mixed, but mostly positive European sentiment data. But again, price movement was mostly tight ahead of a slew of top tier U.S. events on the forex calendar.
The action has already started off as we just got the U.S. ADP employment survey, coming in below expectations at 218K vs. 230K forecast, 281K previous! It’s still way too early to tell, but the immediate reaction was bearish for the Greenback, but in limited movement.
This makes sense because in a few minutes we’ll get hit with another top tier U.S. event in the form of the preliminary GDP read for the second quarter. The forecast is for a 3.0% gain vs. the -2.9% decline over the first quarter. At this time we’ll also get Canadian prices data in the form of raw materials and industrial product prices indexes.
And at 7:00 pm GMT, we’ll get the big potential market mover of the day: FOMC monetary policy decision and outlook. Actually, most forex players think that this one may be a snoozer as there are no changes expected to monetary policy or when they may start raising interest rates. But of course, you’ve definitely got to pay attention and be on the ready when this announcement hits because it can move ALL financial markets around the globe if we see a surprise. Stay frosty!
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