London Session Recap – Sept. 11, 2014

  • German CPI (Final) m/m remains inline with forecast/previous at 0.0%
  • French CPI m/m inline with forecast at 0.4%, above -0.3% previous
  • ECB Monthly Bulletin released

We continued to see elevated volatility levels relative to the summer, especially in Sterling possibly due to the developing Scottish referendum story.  It looks like we’re still on the path towards a ‘Yes’ vote for Scotland to leave the U.K., but the Pound shrugged off the sentiment today, rallying on the session against the majors:

GBP/USD is up 40 pips (+0.25%) to 1.6249, GBP/JPY is up 80 pips (+0.46%) to 173.96, EUR/GBP is down 14 pips (-0.18%) to .7952

Sterling is up big against the comdolls, who are taking a broad hit on the session, possibly a blanket reaction to weak Chinese CPI data (2.0% vs. 2.3% previous) and/or possibly on the RBNZ’s signal that they will continue to pause any interest rate changes longer than previously thought.  Whatever the direct catalyst may be, the comdolls are down against most of the majors on strong momentum:

GBP/NZD is up 161 pips (+0.82%) to 1.9862, CAD/CHF is down 72 pips (-0.85%) to .8489, and AUD/USD is down 41 pips (-0.32%) to .9108

Finally, the euro is finding a bid on the session, unlikely on the inflation data from Germany and France earlier, or on the release of the ECB monthly bulletin that highlighted the potential need for more monetary policy action and calls for a weaker euro.  The price action may be more of a bounce from very oversold conditions, as well as capital flowing from the comdolls. EUR/USD is up 13 pips (+0.10%) to 1.2926

The forex calendar for the Thursday afternoon London/morning U.S. session has a few data points from the U.S and Canada that will hopefully add to the rise in volatility (and rise in forex trading opportunities).

At 1:30 pm GMT, we’ll get house price index data from Canada (0.2% forecast/previous) and weekly jobless claims data from the U.S. (300K forecast vs. 302K previous).  Both are in the mid-tier range of data importance, so I wouldn’t expect much a of a reaction from the forex markets unless we get a big surprise read

At 7:00 pm GMT, we’ll get a report on the U.S. Federal Budget, which has been on somewhat of a trend towards less deficit over the last few months, but today’s number is expected to come in lower at -$130B vs. -$94.6B previous.  This isn’t usually a big market mover, but one to be aware of as government spending can have a significant impact on the economy.  Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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