London Session Recap – Aug. 4, 2014

  • Swiss SVME PMI below expectations: 54.3 vs. 56.2 forecast, 54.0 previous
  • European Sentix Sentiment Indicator lower: 2.7 vs. 10.1 previous
  • U.K. Construction PMI: 62.4 vs. 62.1 forecast, 62.6 previous
  • European PPI m/m ticks slightly higher: 0.1% vs. 0.0% forecast, -0.1% previous
  • Canadian Bank Holiday

Price action was limited among forex pairs this morning London, with the exception of a few choice pairs thanks to mid-tier European data.

The Swiss SVME PMI came in mixed, below forecast but above previous,  and the reaction was generally bullish for the Swiss Franc, but the looks to have been faded as risk sentiment turned positive during European trade.  USD/CHF is up 13 pips (+0.15%) on the session to hold above the .9050 minor psychological area.

The Sentix Sentiment Survey index continues to disappoint as it continues its trend lower since topping out at around 13.9 in March.  The initial reaction was slightly bullish for the euro, but like the Swiss Franc, we’re seeing the currency move fading in favor for “riskier” currencies as sentiment turns higher.  This has brought EUR/USD to near breakeven on the session, trading around 1.3422.

And finally, U.K. construction PMI came in mixed: slightly below previous but beats expectations at 62.4. This leading indicator of economic health still beats the June low of 60.0 which seems to be keeping the recent Sterling sell off at bay for now as British Pound pairs are generally up on the session since the release:

GBP/USD is up  13 pips (+0.08%) to 1.6833, GBP/JPY is up 22 pips (+0.13%) to 172.73, and EUR/GBP is down 8 pips (-0.10%) to .7971

The calendar for the afternoon U.K./morning U.S. session is bare, so price action will likely be influenced by broad risk sentiment.  Look for cues from the U.S. equity markets to drive sentiment as the U.S. is in the midst of its earnings season, as well as geopolitical stories to drive safe haven sentiment as the tensions in Europe and the Middle East continue to be closely watched.  Also, Canadian banks will be on holiday for Civic day, so liquidity will be even lighter than usual during the dog days of summer.  Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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