London Session Recap – Sept. 26, 2014

  • German GFK Consumer Sentiment lower: 8.3 vs. 8.5 forecast, 8.6 previous
  • German Import Price Index m/m improves: -0.1% vs. -0.2% forecast, -0.4% previous

The morning London session was relatively quiet with no major economic news, but there were a few moves of note among the yen and euro.

First, we got mixed data from Germany, and while the import price index data did come better-than-expected, it was still a negative read on the monthly number.  After rallying in Asia, the euro has taken a hit against the major currency since the early morning release of the data, with momentum still on the side of the sellers:

EUR/USD is down 20 pips (-0.20%) to 1.2729, EUR/GBP is down 6 pips (-0.8%) to .7806, EUR/AUD is down 28 pips (-0.19%) to 1.4478

The Japanese yen selloff continued in the morning London trade, sparked by weaker-than-expected inflation readings from Japan during the Asia session. Much like the euro, the yen’s weakness doesn’t seem to be slowing down with most yen pairs trading around session highs:

USD/JPY is up 40 pips (+0.37%) to 109.13, EUR/JPY is up 35 pips (+0.25%) to 138.97, and AUD/JPY is up 41 pips (+0.42%) to 95.94

The forex calendar for the Friday afternoon London/morning U.S. session has some major economic data points from the U.S. that will hopefully provide one or two opportunities before the week closes out.

At 1:30 pm GMT, we’ll get the final reads on the core PCE Price Index and GDP from the U.S.  The forecast is for the inflation to remain at previous estimates (core PCE at 2% q/q) but for the GDP number to be revised higher to 4.6% from 4.2%.  These numbers do have a high probability of spiking volatility, so I’d be cautious with dollar trades during this hour.

At 2:55 pm GMT, we’ll get the final read on the University of Michigan sentiment surveys, forecast to tick higher to 84.8 vs. 84.6 previous.  This is a mid-tier event that has be on the downtrend for the last few months.  Breaking that trend could provide a very short-term reaction from the forex markets, so once again, be aware of dollar positions and orders during this time. Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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