London Session Recap – Aug. 6, 2014

  • German Factory Orders (sa) disappoints: -3.2% vs. 0.9% forecast, -1.6% previous
  • European Retail PMI weaker-than-previous: 47.6 vs. 50.0
  • Swiss CPI m/m lower: -0.4% vs. -0.4% forecast, -0.1% previous
  • U.K. Halifax House Price Index m/m up: 1.4% vs. 0.4% forecast, -0.4% previous
  • U.K. Manufacturing Production m/m weaker: 0.3% vs. 0.6% forecast, -1.3% previous
  • U.K. Industrial Production m/m lower: 0.3% vs. 0.6% forecast, -0.6% previous

Another day, another hit for European currencies thanks to Russian tensions and mixed economic data from Europe and the U.K.

It was seemingly all bad news from Europe with a wide array of negative data hitting the wires this morning.  Because of its size and influence, weak data German data is almost always never take well by Euro traders, and the the Retail PMI picture just turned ugly coming in below the 50 contractionary/expansionary level.  The Euro took a big hit on the news and the selling momentum seems to still be in play:

EUR/USD is down 28 pips (-0.21%) to 1.3346, EUR/JPY is down 63 pips (-0.46%) to 136.57, and EUR/AUD is down  53 pips (-0.37%) to 1.4319

We got mixed data from the U.K. with the housing sector posting some promising numbers, but the manufacturing sector showing weakness, which is what seems to be the focus of Sterling traders.  The British Pound did extend the drop from the Asia session, but it was limited as it looks like the move is out of steam.

GBP/USD is down 43 pips (-0.26%) 1.6838, GBP/JPY is down 86 pips (-0.50%) to 172.33, and GBP/CHF is down 21 pips (-0.13%)

We’ve got a light forex calendar for the afternoon U.K. morning/ U.S. session, with only a couple of  mid-tier data in the lineup.

At 1:30 pm GMT, we got the Canadian Merchandise Trade number, coming in at C$1.86B vs. C$580M previous. It looks like there was an uptick in exports while imports turned lower to push the overall read much higher than previous.  This is good news for Loonie bulls as the initial reaction seems to be a positive one for the Canadian Dollar.

We also got the U.S. Trade Balance, which came in at -$41.5B vs. -$44.8B forecast.  While still showing a deficit, this is another step towards improvement since the low of the year back in June.  The initial reaction in the Greenback was to the downside, but very limited as it seems like it’s already being faded at the moment.

With a lack of data releases for the rest of the session, the 1:30 pm GMT data and  broad risk sentiment should be the main drivers, the latter most likely being influenced by U.S. earnings and geopolitical tensions from Russia.  Stay Frosty!

See also:

Asia Session Recap

U.S. Session Recap

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