London Session Forex Recap – Nov. 3, 2014

  • Swiss Manufacturing PMI improves: 55.3  vs. 51.3 forecast
  • European Manufacturing PMI weaker: 50.6 vs. 50.7 forecast/previous
  • U.K. Manufacturing PMI  improves: 53.2 vs. 51.4 forecast, 51.6 previous

We got more reads on global manufacturing conditions, with purchasing managers from the U.K. and Switzerland giving positive vibes, and not so bad vibes from Europe.  Taking a quick look at Europe, while we did see a below 50 read (below 50 indicates contractionary conditions) from France at 48.5, it was an improvement from 47.3 forecast/previous.  And while Germany did come in below expectations/previous read of 51.8, it was only slightly below and it does still expansionary conditions.  The reaction from today’s data was as expected with the euro falling to the British pound and Swiss franc:

EUR/GBP is down 18 pips (-0.23%) to .7807, EUR/CHF is down 10 pips (-0.09%) to 1.2059

But the big mover on the session was once again, the Japanese yen.  The yen selling continues at the start of the new month with forex traders pushing the currency lower on last week’s surprise easy money expansion by the BOJ.  Yen pairs continued their rise with some even testing or breaking to new highs of the year, and still going strong:

USD/JPY is up 143 pips (1.28%) to 113.75, EUR/JPY is up 157 pips to 142.13, GBP/JPY is up 234 pips (+1.35%) to 182.07

The forex calendar for the first afternoon London/morning U.S. session of the week continues the global look at manufacturing with reads from the U.S., starting with the Markit manufacturing PMI read (56.2 forecast/previous) at 2:45 pm GMT.  This probably won’t cause much of a stir because of the ISM Manufacturing PMI (56.5 forecast vs. 56.6 previous) and construction spending (0.7% forecast vs. -0.8% previous) numbers coming soon after it at 3:00 pm GMT.  I’m sure forex traders will want to wait to get all three numbers before making moves on the Greenback, especially since both manufacturing PMI numbers are expected to come in near their previous reads.

Overall, it looks like the Japanese  yen is still the currency to watch this week, forex traders may be a little less active ahead of a slew of employment reports from around the globe, and risk sentiment is on the move towards aversion as we’re seeing global equities in Asia and Europe falling and the comdolls taking a small hit on the session, possibly due to a tick lower in China’s manufacturing PMI numbers. Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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