London Session Recap – Sept. 24, 2014

  • Swiss UBS Consumption Indicator lower: 1.35 vs. 1.67 previous
  • German IFO Business Climate: 104.7 vs. 105.8 forecast, 106.3 previous
  • German IFO Current Conditions 110.5 vs. 110.2 forecast, 111.1 previous
  • German IFO Expectations: 99.3 vs. 101.2 forecast, 101.7 previous

Forex price volatility was low and mostly choppy, but we did see some directional moves thanks to a couple of data points from Switzerland and Germany.

The Swiss UBS consumption indicator is a read on the consumer sector analyzing data from retail, tourism, automotive, and confidence surveys. For the second month in a row, it dropped from its peak in July (2.06), sparking a bearish reaction in many of the franc pairs. It looks like the franc is down against most majors and the momentum doesn’t seem to be slowing down:

USD/CHF is up 17 pips (+0.21%) to .9415, CHF/JPY is down 30 pips (-0.27%) to 115.52, and the closely watched EUR/CHF by the SNB is just above breakeven on the session at 1.2076.

Germany’s IFO data was mostly disappointing and most likely the catalyst for broad weakness in the euro this morning. We’re seeing the shared currency down on the session against most of the majors, with the down move looking like it’s picking up steam:

EUR/USD is down 21 pips (-0.16%) to 1.2824, EUR/JPY is down 36 pips (-0.26%) to 139.49, and EUR/GBP down 15 pips (-0.20%) to .7821

We’ve got a near empty forex calendar for the Wednesday afternoon London/morning U.S. session.  It’s not until 3:00 pm GMT that we get the monthly U.S new home sales data, but it does have the potential to spark short-term volatility.  The forecast is for around 430K new homes vs. 412K in the previous month, which would be the start of a new trend higher since dropping to 406K in July from over 500K in June.

With a relatively light calendar ahead, the forex markets may take their cues from broad risk sentiment, which has been sliding towards risk-off flows recently on Syrian airstrikes operations and other geopolitical concerns, as well as weak data from China and Europe.  Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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