London Session Forex Recap – Feb. 17, 2015

  • U.K. CPI y/y: 0.3% vs. 0.4% forecast, 0.5% previous
  • German ZEW Economic Sentiment: 53 vs. 55 forecast, 48.4 previous
  • European ZEW Economic Sentiment: 52.7 vs. 45.2 previous

Despite a breakdown between European finance ministers and Greece yesterday, the euro was on the rise, likely on the positive ZEW economic sentiment reads out of Europe today. ZEW survey results show that confidence is on the rise with the European Central Bank preparing for quantitative easing and a weakening euro expected to boost the European economy within this year. Overall, the euro is higher against most of the majors on the session, with momentum still going strong at the moment:

EUR/USD is up 75 pips (+0.65%) to 1.1423, EUR/JPY is up 125 pips (+0.93%) to 135.70, and EUR/GBP is up 51 pips (+0.70%) to .7437

The British pound is going in the opposite direction of the euro, down on the session likely due to the latest consumer price index read showing UK inflation falling to the lowest levels since records began in 1989. The drop was largely due to the collapse of oil prices as well as lower food prices. Sterling took a hit across the boards with selling momentum still going strong a few hours after the release, especially against the comdolls:

GBP/AUD is down 134 pips (-0.68%) to 1.9628, GBP/CAD is down 148 pips (-0.78%) to 1.9000, and GBP/NZD is down 100 pips (-0.49%) to 2.0362

The forex calendar for the Tuesday afternoon London/morning U.S. session is pretty light with U.S. data to give us a broad update on the U.S. economy.

At 1:30 pm GMT, we’ll get the Empire State survey for a read on manufacturing conditions in New York State. The forecast is for an index read of 8.5 vs. 9.95 previous, and this is a mid-tier event so there could be a short-term reaction in the Greenback if we see a outsized surprise between the actual read and forecast/previous.

At 3:00 pm GMT, we’ll get the NAHB builders survey for an updated read on the U.S. housing sector, with a forecast for an index read of 58 vs. 57 previous. This is also a mid-tier economic event, so like the Empire State survey we may only see a reaction with a big deviation from the forecasted/previous read.

And finally at 9:00 pm GMT, we’ll get the net long-term TICS flows data for a read on demand for U.S. financial assets. This is a low tier event and it comes after the U.S. session close, so it’s likely we won’t see a reaction, but be aware of the $33.5B previous read in case we see a large gap between actual and previous.

The Greece-EU talks will continue to remain in focus, as well as a potential breakdown of the ceasefire agreement in Ukraine to influence broad risk sentiment.  Stay frosty forex friends!

See also:

Asia Session Recap

U.S. Session Recap

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