London Session Forex Recap – Oct. 7, 2014

  • German Industrial Production m/m: -4.0% vs. -1.5% forecast, 1.6% previous
  • Swiss CPI m/m: 0.1% vs. 0.2% forecast, 0.0% previous
  • Swiss Retail Sales y/y: 1.9% vs. -0.3% previous
  • U.K. Manufacturing Production m/m: 0.1% vs. 0.1% forecast, 0.3% previous
  • U.K Industrial Production m/m: 0.0% vs. o.4% previous

Lots of data to move the morning London session forex markets, which saw directional moves in the Euro region currencies and the comdolls.

Thanks to a very weak German industrial production read this morning (probably the biggest month-to-month drop since 2009), forex traders are punishing the euro this morning against the majors right from the London open.  EUR/USD moved from 1.2660 to break back below the 1.2600, but it looks like the bleeding has stopped for now with many euro pairs stabilizing and bouncing.  EUR/USD is trading back up on a bounce, currently around 1.2619 but down 35 pips or-0.28% on the session.

The comdolls are currently on a trend higher on the session, lead by the Australian dollar which is rallying after the Reserve Bank of Australia left monetary policy unchanged this morning.  With the outlook of no rate changes for a while, forex traders took this as a positive for the Aussie in Asia and continuing into London trade.  The momentum still seems strong with the Aussie still up on the session.

AUD/USD is up 53 pips (+0.60%) to .8812, AUD/JPY is up 25 pips (+0.27%) to 95.54, and AUD/NZD is up 56 pips (+0.51%) to 1.1225

The forex calendar for the Tuesday afternoon London/morning U.S. trading session light once again with data from the U.S., the U.K. and Canada to look out for.

At 1:30 pm GMT, we’ll get the Canadian building permits number for a fresh read on the housing sector.  The forecast is for a drop to a -6.5% change vs. an 11.8% gain in August.  We haven’t seen a negative read since May 2014, so this could have a strong affect on the Loonie, which has held up pretty well amid the recent commodity selloff.

Then at 3:00 pm GMT, we’ll get a mix of mid-tier economic data from the U.K. and the U.S.  From the U.K. we’ll get the NIESR GDP estimate for a read on economic growth over the past three months. This number has been slowly grinding lower since May 2014, which peaked at 1.0% q/q. From the U.S., we’ll get IBD consumer optimism data and JOLTS jobs openings data.  The jobs opening data is probably the market mover out of the two, but only if we see a significant data point from the previous. 4.67M number.

Finally at 8:00 pm GMT, we’ll get the U.S. consumer credit number for a read on retail spending debt, which is forecasted to dip lower to $20B vs. $26.01B.  This is not really a market mover, but something to watch in case we get a large outlier from the current trend higher in consumer credit. Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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